Chapter 14 – Payment and Refund of Corporate Tax

The corporate tax compliance in UAE is a fundamental responsibility for businesses operating within the country. The chapter Fourteen of the Federal Decree-Law No. 47 of 2022 outlines the requirements related to the corporate tax payable and the conditions under which a business may be eligible for a refund. Understanding these provisions is crucial for timely settlement of tax liabilities, avoiding hefty penalties, and claiming legitimate refunds where applicable.

The regulations for corporate tax payment and refund ensure that corporate tax dues are settled within a specified time frame, and the refund provisions offer a method for reclaiming the overpaid amounts or excess withholding tax credits. These provisions ensure fair treatment, maintain transparency, and promote smooth tax administration.

Article 48 – Corporate Tax Payment

Every Taxable Person is required to settle their UAE corporate tax liability within nine (9) months from the end of the relevant Tax Period, unless a different due date is determined by the tax authority.

The corporate tax due date is calculated from the end of the tax period for which the corporate tax is being assessed. This timeline helps businesses to plan their cash flow in advance and meet their corporate tax obligations without delays.

Failure to pay corporate tax can result in administrative penalties, interest charges, or compliance risks for businesses

Article 49 – Corporate Tax Refund

This article establishes the conditions under which a Taxable Person may apply for a corporate tax refund. 

A business may request a refund in the following situations:

• Excess Withholding Tax Credit – If the amount of withholding tax credit exceeds the corporate tax liability of the taxable person for the relevant period.
  
• Overpayment of Corporate Tax – If the taxpayer has paid more than the actual corporate tax payable due to miscalculation, wrong adjustments, or other reasons recognized by the FTA.

The authority is responsible for reviewing the refund application of the taxable persons. A formal notice of the decision will be issued to the applicant, that is aligned with the procedures outlined in the Tax Procedures Law making sure that every refund request is evaluated consistently and transparently.

The refund provisions in the corporate tax law protect taxable persons from bearing undue financial burdens. This also reinforces trust in the UAE tax system by establishing trust and fairness in collection and settlement of corporate tax.

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