The UAE government has announced key amendments to its corporate tax law, providing clarity on calculating and settling tax liabilities when using credits, incentives, and reliefs. These changes, issued via a new decree, outline a sequential process: first applying withholding tax credits, then foreign tax credits, followed by Cabinet-approved incentives, with any remaining tax due paid directly. Taxpayers now have the right to claim refunds for unutilised tax credits, subject to specific timelines and procedures, addressing previous uncertainties especially for businesses with overseas income or complex structures. Experts note this enhances transparency and administrative consistency, refining the 9% corporate tax regime introduced in 2023 for profits over Dh375,000.
What this means:
UAE business owners should review their tax positions to leverage these credits effectively and claim unused refunds promptly, potentially improving cash flow amid ongoing tax reforms like upcoming VAT simplifications.