Introduction – Chapter 14 Payment and Refund of Corporate Tax under the UAE Corporate Tax Law
At the end of every Tax Period, Corporate Tax under the UAE Corporate Tax Law becomes due for a Taxable Person. This is called Corporate Tax Payable. It can also become due for payment for one or more Tax Periods to the Federal Tax Authority. The UAE Corporate Tax Law provides for guidelines as to the payment of Corporate Tax Liability and prescribed the timeline within which such liability is to be settled. Additionally, there might be a situation where the Taxpayer has paid Corporate Tax to the Federal Tax Authority which is in excess of the its Corporate Tax Liability due under the Law.
In such a situation, the Taxable Person can file an application for refund of Corporate Tax under the UAE Corporate Tax Law.
Article 48 – Corporate Tax Payment under the UAE Corporate Tax Law
As per the UAE Corporate Tax Law, within (9) nine months from the end of the applicable Tax Period, or by such other date as the Federal Tax Authority may specify, a Taxable Person must settle any Corporate Tax liability due under the Law to the Federal Tax Authority.
Tax Return and Corporate Tax Payment: The due date for Corporate Tax payment coincides with the due date for filing of Corporate Tax Returns as per Article 53 of the UAE Corporate Tax Law. This means that Taxable Persons can pay Corporate Tax at the same time as filing their Tax Return.
This shows that the UAE Corporate Tax is a self-assessed tax, and it is meant to minimize the compliance burden for taxpayers.
Article 49 – Corporate Tax Refund under the UAE Corporate Tax Law
Application to Federal Tax Authority: There may be instances where payment by a Taxable Person to the FTA has been made in excess of the Corporate Tax due under the Law. In such a case, the Taxable Person can claim a Corporate Tax Refund. It may apply to the Authority for a refund in line with the requirements of the Tax Procedures Law in the following instances:
- Withholding Tax Credit: The WTC available to a Taxable Person’s exceeds its Corporate Tax liability, due under the Law. ; or
- Corporate Tax paid in excess: Any other situation where the Authority is certain that the Taxable Person has paid Corporate Tax in excess of what he is liable to pay as per his Corporate Tax Payable.
Decision by the Federal Tax Authority: The FTA shall inform the Taxable Person via a notification about its decision regarding the application of Corporate Tax Refund filed by such Person.
This is as per the standard practice with respect to a refund request in the UAE.
Have you paid tax in excess of your Corporate Tax Liability, due under the UAE CT Law?
