Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax

Article 1 — Definitions ¶

In the application of the provisions of this Decree-Law, the following words and expressions shall have the meanings assigned to each, unless the context otherwise requires: State; Federal Government; Local Government; Ministry; Minister; Authority; Corporate Tax; Business; Qualifying Income; Government Entity; Government Controlled Entity; Person; Business Activity; Mandated Activity; State's Territory; Natural Resources; Extractive Business; Non-Extractive Natural Resource Business; Qualifying Public Benefit Entity; Qualifying Mutual Fund; Exempt Person; Taxable Person; Licensing Authority; License; Taxable Income; Fiscal Year; Tax Return; Tax Period; Related Party; Revenue; Recognized Stock Exchange; Resident Person; Non-Resident Person; Free Zone; Free Zone Person; Unincorporated Association; Permanent Establishment; State Sourced Income; Qualifying Free Zone Person; Investment Manager; Corporate Tax Payable; Foreign Partnership; Foreign Tax Credit; Family Foundation; Interest; Accounting Income; Exempt Income; Connected Person; Tax Loss; Qualified Business Activity; Foreign Permanent Establishment; Market Value; Qualifying Group; Net Interest Expense; Bank; Insurer; Control; Tax Group; Withholding Tax Credit; Withholding Tax; Tax Registration; Tax Registration Number; Tax Deregistration; Tax Procedures Law; Administrative Fines; Supplementary Tax; Multinational Enterprise. [full definitions in original document]

Chapter Two: Imposition of Corporate Tax and Applicable Rates

Article 2 — Imposition of Corporate Tax ¶

Corporate Tax shall be imposed on Taxable Income, at the rates determined under this Decree-Law, and ...

Article 3 — Corporate Tax Rate ¶

1. Corporate Tax shall be imposed on the Taxable Income at the following rates: a. 0% (zero percent) ... [rate bands in original document]

Chapter Three: Exempt Person

Article 4 — Exempt Person ¶

1. The following Persons shall be exempt from Corporate Tax: a. A Government Entity. b. A Government Controlled Entity ...

Article 5 — Government Entity ¶

1. A Government Entity shall be exempt from Corporate Tax and the provisions of this Decree-Law shall ...

Article 6 — Government Controlled Entity ¶

1. A Government Controlled Entity shall be exempt from Corporate Tax and the provisions of this Decree-Law shall ...

Article 7 — Extractive Business ¶

1. A Person shall be exempt from the Corporate tax and the provisions of this Decree-Law shall not apply ...

Article 8 — Non-Extractive Natural Resource Business ¶

1. A Person shall be exempt from Corporate tax and the provisions of this Decree-Law shall not apply ...

Article 9 — Qualifying Public Benefit Entity ¶

1. A Qualifying Public Benefit Entity shall be exempt from Corporate Tax if all of the following conditions ...

Article 10 — Qualifying Mutual Fund ¶

1. A mutual fund may apply to the Authority to be exempt from Corporate Tax as a Qualifying Mutual Fund ...

Chapter Four: Taxable Person and Corporate Tax Base

Article 11 — Taxable Person ¶

1. Corporate Tax shall be imposed on a Taxable Person at the rates determined under this Decree-Law ...

Article 12 — Corporate Tax Base ¶

1. A Resident Person, which is a juridical person, is subject to Corporate Tax on its Taxable Income ...

Article 13 — State Sourced Income ¶

1. Income shall be considered a State Sourced Income in any of the following cases: a. Where it is ...

Article 14 — Permanent Establishment ¶

1. A Non-Resident Person shall be deemed to have a Permanent Establishment in the State in any of the ...

Article 15 — Investment Manager Exemption ¶

1. For the purposes of Clause (6) of Article (14) of this Decree-Law, an Investment Manager shall be ...

Article 16 — Partners in an Unincorporated Association ¶

1. For the purposes of this Decree-Law, unless an application is made under Clause (8) of this Article ...

Article 17 — Family Foundation ¶

1. A Family Foundation may submit an application to the Authority to be treated as an Unincorporated ...

Chapter Five: Free Zone Person

Article 18 — Qualifying Free Zone Person ¶

1. A Qualifying Free Zone Person is a Free Zone Person that meets all of the following conditions: ...

Article 19 — Election to be Subject to Corporate Tax ¶

1. A Qualifying Free Zone Person may elect to be subject to Corporate Tax at the rates specified under ...

Chapter Six: Calculating Taxable Income

Article 20 — General Rules for Determining Taxable Income ¶

1. The Taxable Income of each Taxable Person shall be determined separately, on the basis of adequate ...

Article 21 — Small Business Relief ¶

1. A Taxable Person that is a Resident Person may elect to be treated as not having derived any Taxable ...

Chapter Seven: Exempt Income

Article 22 — Exempt Income ¶

The following income and related expenses shall not be taken into account in determining the Taxable ...

Article 23 — Participation Exemption ¶

1. Income from an equity participation shall be exempt from Corporate Tax, subject to the conditions ...

Article 24 — Foreign Permanent Establishment Exemption ¶

1. A Resident Person may elect to not take into account the income, and associated expenses, of its ...

Article 25 — Non-Resident Person Operating Aircraft or Ships in International Transportation ¶

Income derived by a Non-Resident Person from the operation of aircraft or ships in international transportation ...

Chapter Eight: Reliefs

Article 26 — Transfers Within a Qualifying Group ¶

1. No gain or loss needs to be taken into account in determining the Taxable Income in relation to the ...

Article 27 — Business Restructuring Relief ¶

1. No gain or loss needs to be taken into account in determining Taxable Income in any of the following ...

Chapter Nine: Deductions

Article 28 — Deductible Expenses ¶

1. Expenses incurred wholly and exclusively for the purposes of the Taxable Person's Business that are ...

Article 29 — Interest Expense ¶

Notwithstanding paragraph (b) of Clause (2) of Article (28) of this Decree-Law, Interest Expense shall ...

Article 30 — General Interest Deduction Limitation Rule ¶

1. A Taxable Person's Net Interest Expense shall be deductible up to (30%) (thirty percent) of the Taxable ...

Article 31 — Special Interest Deduction Limitation Rule ¶

1. No deduction shall be allowed for Interest Expense incurred on a loan obtained, directly or indirectly ...

Article 32 — Entertainment Expenses ¶

1. Subject to Article (28) of this Decree-Law, a Taxable Person shall be allowed to deduct (50%) (fifty percent) ...

Article 33 — Non-deductible Expenses ¶

No deduction is allowed for: 1. Donations, grants or gifts made to an entity that is not a Qualifying ...

Chapter Ten: Transactions with Related Parties and Connected Persons

Article 34 — Arm's Length Principle ¶

1. In determining the Taxable Income, transactions and arrangements between Related Parties shall meet ...

Article 35 — Related Parties and Controls ¶

1. For the purposes of this Decree-Law, "Related Parties" means any of the following: a. Two or more ...

Article 36 — Payments to Connected Persons ¶

1. Without prejudice to the provisions of Article (28) of this Decree-Law, a payment or benefit provided ...

Chapter Eleven: Tax Loss Provisions

Article 37 — Tax Loss Relief ¶

1. A Tax Loss can be offset against the Taxable Income of subsequent Tax Periods to arrive at the Taxable ...

Article 38 — Transfer of Tax Loss ¶

1. A Tax Loss or a portion thereof may be offset against the Taxable Income of another Taxable Person ...

Article 39 — Limitation on Tax Losses Carryforward ¶

1. Tax Losses can only be carried forward and utilized in accordance with the provision of Clause 2 ...

Chapter Twelve: Tax Group Provisions

Article 40 — Tax Group ¶

1. A Resident Person, which for the purposes of this Decree-Law shall be referred to as a "Parent Company" ...

Article 41 — Date of Formation and Cessation of a Tax Group ¶

1. For the purposes of Article (40) of this Decree-Law, a Tax Group shall be formed, or a new Subsidiary ...

Article 42 — Taxable Income of a Tax Group ¶

1. For the purposes of determining the Taxable Income of a Tax Group, the Parent Company shall consolidate ...

Chapter Thirteen: Calculation of Corporate Tax Payable

Article 43 — Currency ¶

For the purposes of this Decree-Law, all amounts shall be quantified in the United Arab Emirates dirham ...

Article 44 — Calculation and Payment of Corporate Tax ¶

Corporate Tax due under this Decree by Law shall be paid in the following order: 1. By using the withholding ...

Article 45 — Withholding Tax ¶

1. The income earned in the State by a non-resident person shall be subject to tax at a rate of (0%) ...

Article 46 — Withholding Tax Credit ¶

1. If a person becomes subject to tax during a taxation period, the corporate tax payable under Article ...

Article 47 — Foreign Tax Credit ¶

1. Corporate Tax due under Article (3) of this Decree-Law can be reduced by the amount of Foreign Tax ...

Chapter Fourteen: Payment and Refund of Corporate Tax

Article 48 — Corporate Tax Payment ¶

A Taxable Person shall settle the Corporate Tax Payable under this Decree-Law within (9) nine months ...

Article 49 — Corporate Tax Refund ¶

1. A Taxable Person may submit an application to the Authority for a Corporate Tax refund in accordance ...

Article (49) BIS Claiming Unused Tax Credit
1. The Taxable Person may claim the unused amount of tax credits that may arise from the incentives ...

Chapter Fifteen: Anti-Abuse Rules

Article 50 — General Anti-abuse Rule ¶

1. This Article applies to a transaction or an arrangement if, having regard to all relevant circumstances ...

Chapter Sixteen: Tax Registration and Deregistration

Article 51 — Tax Registration ¶

1. Any Taxable Person shall register for Corporate Tax with the Authority in the form and manner and ...

Article 52 — Tax Deregistration ¶

1. A Person with a Tax Registration Number shall file a Tax Deregistration application with the Authority ...

Chapter Seventeen: Tax Returns and Clarifications

Article 53 — Tax Returns ¶

1. Subject to Article (51) of this Decree-Law, a Taxable Person shall file a Tax Return, as applicable ...

Article 54 — Financial Statements ¶

1. The Authority may, by notice or through a decision issued by the Authority, request a Taxable Person ...

Article 55 — Transfer Pricing Documentation ¶

1. The Authority may, by notice or through a decision issued by the Authority, require a Taxable Person ...

Article 56 — Record Keeping ¶

1. Notwithstanding the provisions of the Tax Procedures Law, a Taxable Person shall maintain all records ...

Article 57 — Tax Period ¶

1. A Taxable Person's Tax Period is the Fiscal Year or part thereof for which a Tax Return is required ...

Article 58 — Change of Tax Period ¶

Notwithstanding Article (57) of this Decree-Law, a Taxable Person can make an application to the Authority ...

Article 59 — Clarifications ¶

1. A Person may make an application to the Authority for a clarification regarding the application of ...

Chapter Eighteen: Violations and Penalties

Article 60 — Assessment of Corporate Tax and Fines ¶

1. A Person may be subject to a Corporate Tax assessment in accordance with the Tax Procedures Law and ...

Chapter Nineteen: Transitional Rules

Article 61 — Transitional Rules ¶

1. A Taxable Person's opening balance sheet for Corporate Tax purposes shall be the closing balance ...

Chapter Twenty: Closing provisions

Article 62 — Delegation of Power ¶

The Minister may delegate his powers under this Decree-Law, in full or in part, to the Authority, which ...

Article 63 — Administrative Policies and Procedures ¶

The administrative policies, procedures and general instructions in relation to the requirements imposed ...

Article 64 — Cooperating with the Authority ¶

All governmental authorities in the State shall fully cooperate with the Authority to carry out what ...

Article 65 — Revenue Sharing ¶

Revenue from corporate tax, supplementary tax, and administrative fines collected pursuant to this Decree-Law ...

Article 66 — International Agreements ¶

To the extent that the terms of an international agreement in force in the State are inconsistent with ...

Article 67 — Implementing Decisions ¶

1. Subject to the powers conferred to the Cabinet under this Decree-Law, the Minister and the Authority ...

Article 68 — Repeals ¶

Any text or provisions contrary to or inconsistent with the provisions of this Decree-Law shall hereby ...

Article 69 — Application of this Decree-Law to Tax Periods ¶

This Decree-Law shall apply to Tax Periods commencing on or after 1 June 2023.

Article 70 — Publication and Entry into Force of this Decree-Law ¶

This Decree-Law shall be published in the Official Gazette and shall enter into force (15) fifteen days ...