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Federal Decree-Law No. 40 of 2024
Federal Decree-Law No. 40 of 2024 Amending Certain Provisions of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
Machine translation of the Arabic original (no official English text found)
Preamble and recitals
Federal Decree-Law No. (40) of 2024 Amending Certain Provisions of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses
We, Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates,
-Having reviewed the Constitution,
-Federal Law No. (1) of 1972 on the Competencies of the Ministries and the Powers of the Ministers, and its amendments,
-Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses, and its amendments,
-Pursuant to what was presented by the Minister of Finance and the approval of the Cabinet,
Have issued the following Decree-Law:
#Article 1
Articles (45) and (46) of the aforementioned Federal Decree-Law No. (47) of 2022 shall be replaced by the following two texts:
New Article (45) – Withholding Tax
1.The State Sourced Income of a Non-Resident Person shall be subject to tax at the rate of (0%) zero percent in the form of Withholding Tax, or at any other rate of Withholding Tax determined by a decision issued by the Cabinet at the suggestion of the Minister, to the extent that such income is not attributable to a Permanent Establishment or nexus in accordance with the provisions of Paragraph (a) or Paragraph (c) of Clause (3) of Article (12) of this Decree-Law.
2.As an exception to Clause (1) of this Article, the Cabinet may, at the suggestion of the Minister, issue a decision determining categories of State Sourced Income that shall be subject to Withholding Tax at rates specified in that decision.
3.The Cabinet may, at the suggestion of the Minister, issue a decision determining any other income that shall be subject to Withholding Tax at rates specified in that decision.
4.The Withholding Tax payable under this Article shall be deducted from the gross amount of the payment and remitted to the Authority in accordance with the forms and procedures and within the period determined by the Authority, and the Authority may add controls or conditions for the purposes of implementing the provisions of this Clause.
New Article (46) – Withholding Tax Credit
1.If a Person becomes a Taxable Person in a Tax Period, the Corporate Tax due under Article (3) of this Decree-Law may be reduced by an amount equal to the Withholding Tax Credit for that same Tax Period.
2.The maximum Withholding Tax Credit under this Decree-Law shall be the lower of the following:
a.The amount of Withholding Tax deducted under Clause (4) of Article (45) of this Decree-Law.
b.The amount of Corporate Tax due under this Decree-Law.
3.Any excess Withholding Tax Credit for the Tax Period resulting from the application of Clause (2) of this Article shall be refunded to the Taxable Person in accordance with Article (49) of this Decree-Law.
#Article 2
This Decree-Law shall be published in the Official Gazette and shall come into effect as of 1 June 2023.
Mohamed bin Zayed Al Nahyan
President of the United Arab Emirates
Issued by us at the Presidential Palace – Abu Dhabi
Date: 28 Rabi' al-Awwal 1446 AH
Corresponding to: 1 October 2024 AD
Source: machine translation prepared for this database from the Arabic original.