The UAE government on Monday announced proposed amendments to the Corporate and Business Tax Law, clarifying the calculation and settlement of corporate tax when incentives and reliefs are utilised. The changes were revealed on December 15.

Under the new decree, taxable entities can claim payments for unused tax credits arising from relevant incentives or reliefs, subject to specified conditions, timeframes, and procedures.

The law now outlines the sequence for settling corporate tax liabilities:

1. Using the withholding tax credit balance under Article 46.

2. Applying foreign tax credits as per Article 47.

3. Utilising other incentives or reliefs approved by the Cabinet on the minister’s suggestion.

4. Paying any remaining corporate tax due under Article 48.

Additionally, the decree empowers the Federal Tax Authority to withhold amounts from corporate tax revenues, including any top-up taxes, to settle approved claims, as decided by the Authority’s Board of Directors.