Introduction
Federal Decree-Law No. (28) of 2025 introduces targeted amendments to Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses (“the Corporate Tax Law”). The amendments do not alter the core design of the UAE Corporate Tax regime, nor do they change the fundamental mechanics by which Corporate Tax Payable is calculated. Instead, they refine and complete the statutory framework governing the settlement of Corporate Tax and the treatment of unused tax credits.
In particular, while Article 44 is formally replaced, its substantive effect remains largely consistent with the pre-existing law. The more significant development arises from the introduction of a new Article 49 bis, which operates in conjunction with Article 44 to enable outcomes that were not previously achievable under the Corporate Tax Law.
This article examines the revised Article 44 and the new Article 49 bis, and clarifies the extent, and limits, of the changes introduced.
Article (44): Order of Settlement of Corporate Tax
Federal Decree-Law No. (28) of 2025 replaces the text of Article 44 of the Corporate Tax Law. However, the replacement does not introduce a new settlement methodology, nor does it reorder the priority in which credits are applied.
Under the revised Article 44, Corporate Tax Payable continues to be settled in the following order:
- By using the Taxable Person’s available Withholding Tax Credit, as determined under Article 46;
- By using the available Foreign Tax Credit, as determined under Article 47, where Corporate Tax remains due after applying withholding tax credits;
- By using any credits, incentives or other forms of relief specified in a Cabinet Decision issued upon the suggestion of the Minister, where Corporate Tax remains due after applying foreign tax credits; and
- By settlement in accordance with Article 48, where Corporate Tax remains payable after the application of the above.
This ordering reflects the same settlement hierarchy that existed prior to the amendment. As such, Article 44 should be understood as procedurally clarified rather than substantively transformed.
The principal refinement introduced by the replacement is the express statutory linkage between incentive-based credits and future Decisions, reinforcing the legislative pathway through which such incentives may be introduced and applied.
What Has Not Changed Under Article (44)
It is important to note what the amendment to Article 44 does not do:
- it does not create new categories of credits or incentives;
- it does not alter the priority or sequencing of existing credits; and
- it does not, by itself, permit incentives or reliefs to be refunded where they exceed a Taxable Person’s Corporate Tax liability.
Accordingly, Article 44 remains a settlement provision, not a standalone incentive mechanism.
Introduction of Article (49 bis): Claim of Unused Tax Credits
The substantive development introduced by Federal Decree-Law No. (28) of 2025 lies in the insertion of Article 49 bis, which establishes a statutory framework for the recovery of unused tax credits.
Under Article 49 bis, a Taxable Person may submit an application, in accordance with the circumstances, timeframes, controls and procedures to be prescribed by Cabinet Decision issued upon the suggestion of the Minister, to claim the unused amount of tax credits arising from:
- incentives or reliefs determined pursuant to Article 20(2)(g); and
- credits applied under Article 44(3),
Article 49 bis further provides that the Federal Tax Authority may withhold amounts from revenues of Corporate Tax and Top-Up Tax for the purpose of settling such claims, based on a decision issued by the Federal Tax Authority.
This provision introduces, for the first time under the Corporate Tax Law, a statutory basis for converting certain incentive-based credits from a purely offsetting mechanism into a potentially recoverable amount, subject to future implementing measures.
How Article 49 bis Compliments Article 49
Article 49 bis operates alongside, rather than in substitution for, the existing Corporate Tax refund mechanism in Article 49. While Article 49 is limited to cases of overpaid Corporate Tax or excess Withholding Tax Credit, Article 49 bis addresses a distinct scenario in which incentive-based credits exceed the Corporate Tax Payable, without necessarily giving rise to an overpayment of tax. The introduction of Article 49 bis therefore fills a structural gap in the Corporate Tax Law, enabling the recovery of unused incentive credits while preserving Article 49 as the primary mechanism for refunds arising from tax overpayments.
Interaction Between Articles 44 and 49 bis
When read together, Articles 44 and 49 bis clarify the intended structure of incentive operation under the Corporate Tax Law.
Article 44 continues to govern how Corporate Tax liabilities are settled, while Article 49 bis addresses what happens where incentive-based credits exceed the Corporate Tax liability available for offset. The ability to claim unused credits therefore does not arise from Article 44 itself, but from the additional mechanism created by Article 49 bis.
This interaction confirms that the amendment to Article 44 is not, in isolation, transformative. Its practical significance is realised only through the parallel introduction of Article 49 bis.
Structural Implications and Anticipated Implementing Measures
The drafting of both provisions makes clear that the legislator has deliberately established an enabling framework, rather than a fully operational regime. Key elements, including eligibility, scope, timing and settlement mechanics, are expressly deferred to future Cabinet Decisions and administrative determinations.
This structure indicates that further implementing legislation and guidance are expected to follow, giving substantive effect to the amended provisions over time without requiring repeated amendments to the primary Corporate Tax Law.
Research and Development Incentives
In this context, it is also relevant to note that the Ministry of Finance has indicated that it is considering the introduction of refundable Corporate Tax incentives aimed at supporting growth and innovation, including a Research and Development (R&D) tax incentive and a refundable tax credit for high-value employment activities. According to statements issued by the Ministry of Finance, these measures are expected to follow public consultations conducted in 2024, with the proposed R&D incentive anticipated to apply to Tax Periods starting on or after 1 January 2026, subject to legislative approval.
Against this backdrop, the introduction of Article 49 bis, read together with Article 44(3), may be understood as establishing part of the statutory settlement infrastructure through which such incentive-based credits could, if introduced, be administered and, where applicable, recovered. However, the final scope, eligibility criteria and operational mechanics of any such incentives remain subject to separate legislation, Cabinet Decisions and further guidance to be issued by the Ministry of Finance.
Conclusion
Federal Decree-Law No. (28) of 2025 does not materially alter the settlement mechanics contained in Article 44 of the Corporate Tax Law. Instead, it clarifies the legislative basis for incentive-based credits and introduces, through Article 49 bis, a new statutory pathway for the recovery of unused credits.
The amendments should therefore be understood as completing and future-proofing the Corporate Tax framework, rather than fundamentally reshaping it. Taxable Persons should monitor forthcoming Cabinet Decisions and administrative guidance, as these will determine the practical impact of the changes introduced.
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