UAE Tax Rules Changes: New Amendments to Take Effect in 2026

The UAE Ministry of Finance has announced major UAE tax rules changes to the tax administration of the country that will take effect from the 1st of January 2026. However, these amendments modify the important provision of the existing Tax Procedures Law (Federal Decree-Law No. 28 of 2022) under Federal Decree-Law No. (17) of 2025. Moreover, this move aims to boost clarity, increase business confidence, and align the fiscal system of the UAE with international standards.

Clear Five-Year Deadline for Tax Refund Requests

A fixed 5-year deadline for requesting a refund of a credit balance or using it to offset existing liabilities is one of the most impactful UAE Tax Rules Changes. Moreover, it will apply to all federal taxes of the country, including corporate tax, VAT, and excise duty. 

Previously, the absence of a predefined deadline created uncertainty in the financial planning. Now, your business or you have a structured window. Hence, it will improve financial certainty and ensure better tax management. 

Exceptions for Late or Last-Minute Claims

The new rule will also provide you with targeted flexibility. Hence, the refund claims might still be accepted after a five-year window in the following conditions:

• When the credit balance arises after the five-year period
• When balances are created within the final 90 days of the limitation period

This will ensure that legitimate taxpayer rights are protected while preventing the loss of refunds due to unavoidable timing problems.

FTA Gets Expanded Audit Powers in Defined Cases

These UAE Tax Rules Changes have also extended the ability of the Federal Tax Authority (FTA) to conduct audits or issue assessments even after the limitation periods end. However, the authority can only perform these tasks in limited and clearly defined circumstances. 

For example, if your refund request to filed in the final year of the five-year window, the FTA can conduct an audit to verify the accuracy of the claim. Hence, this balanced approach protects the public finance and provides businesses with a predictable compliance expectation. 

Binding Directions to Ensure Uniform Interpretation

A big structural update includes the new authority of the FTA to issue official binding directions on how specific tax provisions should be applied. However, these directions will be binding on taxpayers and the FTA itself. 

This change has addressed long-standing concerns over businesses regarding the inconsistent interpretation of the laws.  So, you can now plan with clarity with binding guidance to reduce your business compliance disputes and legal issues. 

Transitional Relief for Older Refund Claims

The Ministry of Finance has also announced temporary relief during the transition period. If your refund window expired before the 1st of January 2026 or within one year, you will receive a special one-year window—until January 1, 2027—to file your refund claims.

In addition, you might also need to submit a Voluntary Disclosure within two years of filing such a refund request if the FTA hasn’t issued a decision. Hence, it will provides you with more time to rectify past errors and ensure fair treatment during the transition period. 

Why UAE Tax Rules Changes Matter

The UAE government said that the UAE Tax Rules Changes have the following goals: 

• Reduce bureaucratic delays
• Improve tax system efficiency
• Strengthen business confidence
• Enhance transparency and predictability
• Support long-term sustainable public revenues
• Boost the UAE’s global competitiveness

By aligning with the international standards, the UAE continues to support its position as the leading destination for investment, commerce, and regional expansion. 

Final words:

The UAE tax rules changes under Federal Decree-Law No. (17) of 2025 is an important step towards a more structured and transparent tax environment. Moreover, businesses across the UAE will benefit from improved clarity and smoother compliance processes due to clear refund deadlines, expanded audit regulations, and consistent interpretation of tax laws. 

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