UAE allows businesses to cash in unused tax credits

RELIEFS TO APPLY FIRST BEFORE LIABILITIES IN NEW LAW UPDATE

- BY NIVETHA DAYANAND Assistant Business Editor

The UAE government has issued a new Federal Decree-Law amending key provisions of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, introducing clearer mechanisms for calculating and settling corporate tax obligations and establishing a formal framework for claiming payments related to unutilised tax credits.

The amendments aim to provide greater clarity on how corporate tax liabilities are settled when incentives, reliefs, and tax credits apply, while offering taxable entities additional flexibility in managing their tax positions.

Tax incentives take priority

Under the updated framework, the calculation and settlement of corporate tax will follow a defined sequence that prioritises the use of available credits and incentives before any remaining liabilities are paid.