The UAE authorities has issued a Federal Decree-Regulation amending key provisions of the Company Tax Regulation, introducing clearer guidelines on how company tax liabilities are calculated and settled when tax credit and incentives apply.
The amendments relate to Federal Decree-Regulation No. 47 of 2022 on the Taxation of Company and Companies and are supposed to offer better certainty for companies utilizing tax credit, incentives and reliefs. Additionally they introduce the likelihood for taxable individuals to assert funds for unused tax credit, topic to situations set out by the Cupboard.
UAE updates company tax guidelines
Underneath the revised framework, the decree clarifies the order through which company tax liabilities should be settled. Tax due will first be offset utilizing any accessible withholding tax credit score steadiness owed to the taxable individual, according to Article 46 of the legislation. If a company tax steadiness stays, overseas tax credit beneath Article 47 should then be utilized.
Any remaining legal responsibility could also be settled utilizing different incentives or reliefs accredited by a Cupboard determination following a proposal from the Minister.
The place tax stays payable in spite of everything relevant credit and incentives have been used, the excellent quantity should be settled in accordance with Article 48 of the Company Tax Regulation.
A newly launched article permits taxable individuals, in sure circumstances, to assert funds in respect of unutilised tax credit arising from accredited incentives or reliefs. These claims will probably be topic to particular situations, timelines and procedures to be decided by the Cupboard.
The amendments additionally authorise the Federal Tax Authority to withhold quantities from company tax revenues, and the place relevant top-up tax revenues, with a purpose to settle accredited refund claims. This will probably be carried out according to a choice issued by the Authority’s board of administrators.
The modifications are supposed to boost transparency, enhance administrative readability and help the efficient implementation of the UAE’s company tax regime.
