The UAE government has issued a new Federal Decree-Law amending key provisions of the Corporate Tax Law (Federal Decree-Law No. 47 of 2022), bringing greater clarity on how corporate tax is calculated and settled when tax credits, incentives and reliefs are involved.

The amendments are designed to make the system clearer, more structured and more flexible for businesses, while also introducing the option to claim payments for unused tax credits in certain cases.

What’s changed?

The updated law clearly sets out the order in which corporate tax liabilities must be settled when incentives apply:

1. Withholding tax credits are used first
2. If tax is still due, foreign tax credits are applied
3. Any remaining liability can then be settled using other incentives or reliefs approved by the Cabinet
4. Any balance after that must be paid in line with existing Corporate Tax rules

In short, credits are now applied in a clear, step-by-step sequence, removing ambiguity for taxpayers.

New option to claim unused tax credits

A key update in the decree allows taxable persons to claim a payment for unutilised tax credits, subject to:

• Specific conditions
• Approved timeframes
• Prescribed procedures

These details will be set out in a Cabinet decision, based on recommendations from the Minister.

Role of the Federal Tax Authority

The amendments also authorise the Federal Tax Authority (FTA) to withhold amounts from corporate tax revenues, and where applicable, top-up tax revenues, to settle approved claims for unused tax credits, following a decision by the FTA’s Board of Directors.

Why it matters

For businesses operating in the UAE, the changes:

• Improve certainty and transparency in tax calculations
• Clarify how incentives and credits are applied
• Introduce greater cash-flow flexibility through potential refunds of unused credits

The UAE’s Securities and Commodities Authority (SCA) has issued a fresh investor alert, warning the public about two companies operating without the required licences.

In a statement on Friday, December 12, the authority identified XC Market Limited and XCE Commercial Brokers LLC as unlicensed entities, noting that both firms are conducting financial activities without SCA approval.

The regulator stressed that the companies are not authorised to carry out regulated investment services or offer any related financial products in the UAE. It also clarified that it bears no responsibility for any transactions conducted with the firms.

The warning follows a series of recent alerts as part of the SCA’s ongoing push to combat fraudulent operators. Earlier this month, the authority cautioned investors about Global Capital Securities Trading, which was posing as a licensed trading firm. On December 3, it also flagged an entity calling itself the Gulf Higher Authority for Financial Conduct, which was found using a misleading website and falsely claiming regulatory status.

The SCA reiterated that investors should verify the licensing status of any company before engaging in financial dealings, as the regulator continues monitoring for unlicensed operators and cloned platforms targeting the UAE market.

The UAE Ministry of Finance has introduced a Cabinet Resolution imposing administrative fines on businesses that fail to comply with the country’s Electronic Invoicing System (EIS), reinforcing the nation’s drive for digital transformation and stronger tax compliance.

The rules apply to all entities required to adopt EIS under Ministerial Decision No. (243) of 2025. Companies using the system voluntarily are exempt from penalties until compliance becomes mandatory.

Fines include:

• Dh5,000 per month for failing to implement EIS or appoint an approved service provider on time.
• Dh100 per electronic invoice not issued or sent on time, capped at Dh5,000 per month.
• Dh100 per electronic credit note not issued or sent on time, capped at Dh5,000 per month.
• Dh1,000 per day for not notifying the Federal Tax Authority of system malfunctions.
• Dh1,000 per day for delays in updating approved service providers on registered data changes.

Officials stressed that the resolution underlines the UAE government’s commitment to international best practices and the development of a fully integrated digital economy.