Law update · December 2025
In December 2025 the UAE issued a new Federal Decree-Law amending the Corporate Tax Law, and it is the most practical update since the law began. It sets a fixed order for settling your tax bill against credits, and for the first time it lets businesses claim cash refunds for unused credits from approved incentives. On top of that, the 15% minimum tax for large multinationals is now live, and new incentives are moving through the system, with the R&D credit already final law. Here is what changed, who it actually affects, and what to do about it.
The December 2025 decree
Three changes, all practical. The decree amends Federal Decree-Law No. 47 of 2022, the Corporate Tax Law itself.
Your tax liability now settles in a defined sequence. First, any withholding tax credit balance under Article 46. If tax is still due, foreign tax credits under Article 47 apply next. Then any other Cabinet-approved incentives or reliefs. Whatever remains is paid under Article 48. No more arguing about which credit goes first.
The headline change: a new article lets taxable persons claim a payment for unutilised tax credits arising from approved incentives or reliefs. Unused does not mean lost anymore. The conditions, timeframes, and procedures will come in a Cabinet decision issued on the Minister of Finance's recommendation, so the mechanics are still being written.
The Federal Tax Authority can now set aside amounts from corporate tax revenues, and where relevant from top-up tax revenues, to pay approved refund claims. The FTA's Board of Directors governs how this works. In plain terms, the refund promise has a funding pipe behind it, not just words.
This matters most if you have foreign operations, withholding taxes, or any incentives on your return. If you are a small mainland company with none of those, your filing barely changes, which is worth knowing before anyone tries to sell you a panic.
Who feels it
Headlines make every amendment sound universal. These are not. Here is an honest mapping:
The 15% minimum tax
The Domestic Minimum Top-up Tax sounds dramatic. For 99% of UAE businesses, it changes nothing.
| Point | Detail |
|---|---|
| Legal basis | Federal Decree-Law No. 60 of 2023 |
| Effective from | Financial years starting on or after 1 January 2025 |
| Who is in scope | Multinational groups with €750 million or more in consolidated global revenue in at least two of the previous four years |
| What it does | Tops the group's UAE effective rate up to 15%, in line with the OECD Pillar Two framework |
| Your SME or startup? | Not in scope. This is a large-multinational rule. |
If you are reading this as the owner of a Dubai SME, you can stop worrying about DMTT. If you sit inside a large group, your group tax team already knows, but the UAE entity's filings still need to reflect it, which is where advisers like us come in. Either way, do not confuse DMTT with the standard 9% corporate tax: they are separate regimes.
On the horizon
Announced by the Ministry of Finance. The R&D tax credit became final law in March 2026; the High-Value Employment credit is still proposed, so treat its timeline as tentative.
A tiered tax credit on qualifying UAE research and development spend: 15% on the first AED 1 million, 35% on spend between AED 1 million and AED 2 million, and 50% on spend between AED 2 million and AED 5 million, each tier also requiring a minimum average R&D headcount (2, 6 and 14 staff respectively). The credit is non-refundable in the current phase, requires project pre-approval from the Emirates R&D Council, and cannot be claimed by businesses that elected Small Business Relief. For tech and product companies doing real R&D here, this could be the single most valuable incentive in the system.
A refundable credit on eligible salary costs for senior roles that add significant economic value, think C-suite and equivalent. Proposed alongside the R&D incentive. If you are hiring top talent into the UAE, keep this on your radar.
Unused incentive credits may be claimable as cash payments under the December 2025 decree once the Cabinet decision sets the procedure. The R&D tax credit itself is non-refundable in its current phase, so unused R&D credits carry forward instead. The loop is closing between earning incentives and actually realising them.
The employment credit still needs final legislation, with more guidance to follow. We track these and will update this guide as Cabinet decisions land.
Stability check
Amendments get the headlines; the constants run your business.
Action plan
FAQs
In December 2025 the UAE issued a new Federal Decree-Law amending Federal Decree-Law No. 47 of 2022. It introduces a fixed sequence for settling tax against credits, a new right to claim payments for unutilised tax credits from approved incentives or reliefs, and gives the FTA power to fund those refunds from tax revenues.
Liabilities settle in this order: first withholding tax credit balances under Article 46, then foreign tax credits under Article 47, then other Cabinet-approved incentives or reliefs, and finally any remaining tax is paid under Article 48.
Under the December 2025 amendments, yes, for unutilised credits arising from approved incentives or reliefs. The claim is subject to conditions, timeframes, and procedures to be set out in a forthcoming Cabinet decision, so the exact process is still being finalised.
No. The 15% Domestic Minimum Top-up Tax applies to multinational groups with 750 million euros or more in consolidated global revenue in at least two of the previous four financial years. Ordinary SMEs and startups are outside its scope.
A tiered tax credit on qualifying UAE research and development spend: 15% on the first AED 1 million, 35% on spend between AED 1 million and AED 2 million, and 50% on spend between AED 2 million and AED 5 million, each tier also requiring a minimum average R&D headcount (2, 6 and 14 staff respectively). The credit is non-refundable in the current phase, requires project pre-approval from the Emirates R&D Council, and cannot be claimed by businesses that elected Small Business Relief.
No. The rate structure is unchanged: 0% on taxable income up to AED 375,000 and 9% above. The recent amendments concern credit settlement mechanics and refunds, not rates.
Keep reading
Ready when you are
We will map your credits against the new settlement order, flag refund opportunities, and keep you clear of the penalties. Start with a Free Finance Review, no obligation. Also see the 2029 small business relief extension.
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