Major Revisions to UAE Tax Procedures Announced for 2026

Post by : Bianca Suleiman

The Ministry of Finance has revealed crucial modifications to the tax procedures law in the UAE, unveiling clearer guidelines for tax obligations and refund periods. These updates, detailed in Federal Decree-Law No. (17) of 2025, will come into force on January 1, 2026.

Under this new framework, taxpayers are allocated a maximum of five years post the tax period to request refunds of credit balances held with the Federal Tax Authority (FTA), or to apply these balances to outstanding tax dues. This structured timeframe aims to enhance certainty and instill better financial discipline within tax processes.

The revisions also provide essential flexibility for situations in which a credit balance emerges after the five-year span or within the last ninety days of that timeline, allowing eligible taxpayers to make refund requests without losing their rights due to timing issues.

Another significant change involves extending the limitation periods. The FTA is now permitted to perform tax audits or issue assessments even after the standard limitation period has concluded, in certain specified situations—such as when a refund request is made within the last year of that period. This measure aims to balance the protection of taxpayer rights with the state’s financial interests.

Additionally, the Authority is empowered to issue binding guidance on the interpretation of tax legislation. Such directions will assist both taxpayers and the Authority itself, fostering consistent interpretation and practical enforcement across a variety of tax situations.

Transitional provisions are also included for taxpayers facing expired or impending credit balance timelines. Those whose five-year period lapsed before January 1, 2026—or will lapse in the year following it—are granted a one-year window from January 1, 2026, to submit refund requests. They may also file voluntary disclosures within two years if no decision regarding these requests has yet been made.

Through these amendments, the UAE seeks to enhance transparency, streamline tax operations, and foster a more efficient business environment, aligning with the country’s broader goal of modernizing its financial systems and ensuring sustainable economic resilience.