UAE’s Corporate Tax Overhaul: Refund Rights and Settlement Reforms That Could Impact Your Business
A new decree simplifies tax settlements and allows businesses to claim unused credits, creating new growth opportunities.
The UAE government has announced updates to its Corporate Tax Law (Federal Decree‑Law No. 47 of 2022) to streamline the calculation and settlement of tax liabilities. The revisions are designed to provide greater clarity for businesses that utilize tax credits and incentives.
Under the new rules, the process of applying these credits has been simplified, eliminating much of the previous uncertainty. Companies can now also claim unused tax credits, offering potential financial relief.
The updates, which were announced in mid-December 2025, are already in effect. Businesses are advised to quickly adapt to these changes to ensure compliance and avoid falling behind.
Background: UAE Corporate Tax Framework
The UAE introduced its corporate tax system in 2023.
The idea behind it was simple: create a system that’s both fair and easy to navigate.
The tax rate is set at 9% on profits over AED 375,000. For profits below that, businesses pay 0%, which helps smaller companies keep more of their earnings. The goal was to make the system straightforward, without adding unnecessary complexity.
As the country continues refining its tax framework, clear rules are becoming even more critical. Businesses need that clarity to manage their taxes effectively, plan for the future, and stay in line with the evolving system.
Key Changes to Corporate Tax Rules
The recent updates to the UAE Corporate Tax Law bring some significant changes that businesses need to understand. These changes streamline tax liability settlement and create new opportunities for businesses to manage their tax positions more effectively.
Let’s break down the key changes you should know.
Clear Sequential Settlement Order
The new rules establish a clear order for settling tax liabilities.
- First, any withholding tax credits are applied, as outlined in Article 46.
- After that, foreign tax credits are used under Article 47.
- Once these are applied, any other approved incentives or reliefs are taken into account, as determined by Cabinet decisions.
- Finally, any remaining tax due will be paid in cash under Article 48.
This structured approach removes ambiguity and makes the process much more predictable for businesses.
New Refund Rights for Unused Credits
One of the most significant updates is the ability for businesses to claim payments for unused tax credits.
Under the new rules, companies can request refunds for tax credits that arise from approved incentives or reliefs.
However, this process comes with conditions, timelines, and procedures set by the Cabinet. This move offers businesses a chance to get financial relief, particularly for credits that would have otherwise gone unused.
Expanded Role for the Federal Tax Authority
The Federal Tax Authority (FTA) now has expanded powers to help manage refund claims.
The FTA can withhold amounts from corporate tax revenues and top-up tax revenues to settle approved refund claims. This change aims to ensure that refunds are processed efficiently and fairly, with oversight provided by board-approved decisions. Businesses will now have more certainty about how and when their claims will be handled.
What Businesses Need to Know
The amendments to the UAE’s Corporate Tax Law remove significant compliance uncertainty by clarifying the order in which tax credits and incentives should be applied. Under the new rules, companies now have a defined sequence for settling corporate tax liabilities, which helps reduce disputes and streamline planning.
This matters for businesses with cross‑border income or complex incentive structures. The law now clearly states that withholding tax credits are applied first, followed by foreign tax credits, then other approved incentives, before any remaining tax is paid in cash. That clarity makes it easier for companies with international operations to forecast their tax positions with confidence.
The most practical change is the new refund mechanism for unused tax credits. Companies can now claim payments for unutilised credits arising from eligible incentives or reliefs, subject to conditions and procedures set by the Cabinet. This gives firms flexibility and can improve cash flow, especially for those with large incentive balances that exceed their immediate tax liabilities.
How ADEPTS Helps Businesses Navigate These Changes
As the UAE introduces new corporate tax rules, ADEPTS is here to help businesses make a smooth transition.
Instead of getting lost in complex tax changes, ADEPTS works directly with clients to ensure they understand exactly what they need to do, from applying for tax credits to managing refunds.
The firm takes the guesswork out of the process by assessing eligibility for tax incentives and unused credits, then guiding clients through the steps to ensure compliance.
For businesses facing cross-border income or complex tax positions, ADEPTS simplifies compliance with the new requirements. The firm helps streamline tax procedures, enabling companies to meet their obligations without missing a beat.
With ADEPTS’ support, businesses can confidently embrace the new tax system and focus on growth.
Conclusion
With the recent updates to the UAE Corporate Tax Law, businesses must stay ahead of the changes to ensure compliance and optimize their tax strategies. The new rules bring much-needed clarity, especially in how tax credits and refunds are handled.
For companies navigating this shift, ADEPTS provides the expertise needed to make sense of these updates and implement them effectively.
By working with ADEPTS, businesses can confidently adapt to the evolving tax landscape, reduce compliance risks, and focus on what matters most—driving growth and success.
References
- Authority, Federal Tax. ‘Legislation’. Federal Tax Authority – Legislation – Corporate Tax,
https://tax.gov.ae//en/legislation/corporate.tax.aspx. - Corporate Tax (CT).
https://u.ae/en/information-and-services/finance-and-investment/taxation/corporate-tax. - Dayanand, Nivetha. ‘UAE Simplifies Corporate Tax Rules and Allows Refunds on Unused Credits’. Gulf News: Latest UAE News, Dubai News, Business, Travel News, Dubai Gold Rate, Prayer Time, Cinema, 15 Dec. 2025,
https://gulfnews.com/business/tax-news/uae-issues-new-decree-clarifying-corporate-tax-settlement-and-credit-refund-rules-1.500380136. - Federal Decree-Law Issued Amending Taxation of Corporation and Businesses Law.
https://www.wam.ae/en/article/bn85hy4-federal-decree-law-issued-amending-taxation. - Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
https://mof.gov.ae/wp-content/uploads/2022/12/Federal-Decree-Law-No.-47-of-2022-EN.pdf. - Federal Tax Authority – Federal Decree-Law No. 47 Of 2022 On Taxation Of Corporations And Businesses.
https://tax.gov.ae/en/content/federal.decreelaw.no.47.of.2022.on.taxation.of.corporations.and.businesses.home.new.aspx.
