UAE to Enforce Major Tax Procedures Law Amendments from January 2026

The Ministry of Finance has announced the issuance of Federal Decree-Law No. (17) of 2025, introducing amendments to Federal Decree-Law No. (28) of 2022 on Tax Procedures. The updated provisions—effective from 1 January 2026—form part of the UAE’s ongoing efforts to improve the efficiency, transparency, and fairness of its tax framework.

 

Enhancing Financial Discipline

 

The amendments aim to create a more structured and transparent legal framework governing tax obligations and procedures. A key update is the regulation of timelines for requesting refunds of credit balances held with the Federal Tax Authority (FTA). Taxpayers will now have a maximum of five years from the end of the relevant tax period to request a refund or use the balance to offset tax liabilities.

 

Additional flexibility is provided for cases where the credit balance arises after the five-year period or within the final ninety days of that period, thereby safeguarding taxpayers’ rights and strengthening financial certainty.

 

Balance and Flexibility

 

The revised law also expands the rules around limitation periods. The FTA may conduct tax audits or issue assessments after the limitation period has expired in certain situations—for example, when refund requests are submitted during the final year of the limitation period. This ensures a fair balance between protecting taxpayer rights and preserving the state’s financial entitlements.

 

Furthermore, the amendments empower the FTA to issue official, binding directions to taxpayers and to the Authority itself concerning the application of tax legislation. These directions aim to unify interpretations, improve implementation, and prevent inconsistencies in handling various cases.

 

Transitional provisions have also been introduced. Taxpayers with credit balances for which the five-year period expired before January 1, 2026, or is due to expire within one year after that date, will have one year from January 1, 2026 to submit refund requests. They may also file voluntary disclosures within two years from the request date, provided no decision has yet been issued by the FTA. These measures promote fairness and ensure earlier cases are addressed transparently and consistently.

 

The Ministry of Finance stated that the amendments reflect the UAE’s commitment to aligning its financial policies with international best practices. The updates are expected to improve tax system efficiency, enhance the business environment, strengthen trust and transparency, reduce administrative burdens, and support sustainable public revenues and economic growth.

 

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