UAE Announces Amendments To Corporate, Business Tax Law

The UAE government announced some amendments to the Law Concerning Corporate and Business Tax on Monday, December 15.

The new decree includes clarification on the mechanism for calculating and settling corporate tax due where the relevant incentives and relief balances are utilised.

The change also allows taxable individuals the right to claim a payment in respect of unutilised tax credits arising from relevant incentives or reliefs, subject to specific conditions, timeframes and procedures.

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The new Decree-Law clarifies that the tax liability shall be settled sequentially as follows:

1. By utilising the withholding tax credit balance due to the taxable person, as provided under Article (46) of the Law.

2. Where a balance of due corporate tax remains, the available foreign tax credit, as stipulated under Article (47), shall be utilised.

3. Should any corporate tax liability remain thereafter, any other balances or forms of incentives or reliefs determined pursuant to a decision issued by the Cabinet at the suggestion of the minister, shall be utilised.

4. Any remaining corporate tax due after utilising the applicable credits and incentives shall be settled in accordance with Article (48) of the Law.

In addition, the newly introduced article authorises the Federal Tax Authority to withhold amounts from corporate tax revenues and where relevant, any top-up tax revenues for the purpose of settling the approved claims, pursuant to a decision issued by the Authority's Board of Directors.

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