How does the foreign tax credit work in UAE Corporate Tax: the law explained

Q: How does the foreign tax credit work in UAE Corporate Tax?

Under Article 47 of the Corporate Tax Law, UAE Corporate Tax can be reduced by the tax paid abroad on the same income. The credit cannot exceed the UAE Corporate Tax due on that income, unused credit cannot be carried forward or back, and the business must keep the records that support the claim.

How does the foreign tax credit work in UAE Corporate Tax?

Short answer

Under Article 47 of the Corporate Tax Law, UAE Corporate Tax can be reduced by the tax paid abroad on the same income. The credit cannot exceed the UAE Corporate Tax due on that income, unused credit cannot be carried forward or back, and the business must keep the records that support the claim.

Checked against the official texts below. The law is the authority; this is not tax advice.

What the law says

Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses, Article 47

Article 47 – Foreign Tax Credit

Corporate Tax due under Article 3 of this Decree-Law can be reduced by the amount of Foreign Tax Credit for the relevant Tax Period.
The Foreign Tax Credit under this Decree-Law cannot exceed the amount of Corporate Tax due on the relevant income.
Any unutilised Foreign Tax Credit as a result of Clause 2 of this Article cannot be carried forward or carried back.
A Taxable Person shall maintain all necessary records for the purposes of claiming a Foreign Tax Credit.

Decisions and FTA guidance on this

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