UAE tax procedures law, tax refund eligibility, and VAT regime update.

January 08 2026

Beginning 1 January 2026, the UAE will implement major amendments to its tax procedures law through Federal Decree-Law No. 17 of 2025, updating Federal Decree-Law No. 28 of 2022. These reforms aim to enhance transparency, streamline procedures, and increase legal certainty for taxpayers. The changes are part of a national push to modernise tax governance and align with international standards. These measures coincide with the comprehensive VAT regime update under Federal Decree-Law No. 16 of 2025.

Key Procedural Changes and Tax Refund Eligibility

One of the most significant updates is the introduction of a clear five-year window from the end of the relevant tax period during which taxpayers may request refunds of credit balances or apply those balances against future tax liabilities. This defines tax refund eligibility with clear timeframes. In specific circumstances, such as credit balances arising after the standard period or near their expiry, the law provides additional flexibility, allowing certain claims to be submitted beyond the typical deadline. The amendments also expand the powers of the Federal Tax Authority (FTA), including the ability to issue binding guidance on the tax treatment of specific transactions. Audit and assessment rules have likewise been refined, allowing the FTA to conduct audits or issue assessments even after the usual limitation period has ended, under defined conditions. Transitional provisions provide relief, extending the window for many taxpayers throughout 2026 to submit refund claims or file voluntary disclosures.

Broader Tax Context: Aligning with VAT Regime Update

The reforms coincide with updates to the UAE VAT regime update under Federal Decree-Law No. 16 of 2025, also effective January 2026. Together, these measures represent a shift toward a more consistent, transparent, and structured tax system, reinforcing the UAE’s position as a competitive and compliant global business hub.

What Businesses Should Do Now Under the New UAE Tax Procedures Law

Companies should reassess their tax positions, especially regarding accumulated credit balances, audit preparedness, and tax refund eligibility. Internal compliance policies may need revision to align with the new deadlines and procedural rules. The upcoming FTA guidance documents will be particularly important for businesses engaged in cross-border transactions or complex supply structures. The UAE tax procedures law changes mark an important step in strengthening tax administration and enhancing procedural fairness.
MIS Legal can assist clients in evaluating their current tax-compliance framework, preparing for the new rules, identifying eligible refund claims, and ensuring alignment with the 2026 regulatory landscape.