On 25 November 2025, the UAE Ministry of Finance introduced two major decree laws that will significantly reshape the country’s tax framework, effective from 1 January 2026. These legislative updates directly impact businesses working with accounting firms in Dubai, especially in the areas of VAT compliance, tax refunds, audits, and voluntary disclosures.
The new laws include Federal Decree-Law No. 16 of 2025, which amends specific provisions of the UAE VAT Law, and Federal Decree-Law No. 17 of 2025, introducing wide-ranging amendments to the Tax Procedures Law. Together, these changes will impact how businesses engage with accounting services and manage their ongoing tax obligations with the Federal Tax Authority (FTA).
At Anh Consultants, we closely monitor regulatory developments to help businesses remain compliant and tax-efficient under the evolving UAE tax landscape.
Key VAT Law Amendments Affecting Businesses in Dubai
Simplification of Reverse Charge Compliance
Under the amended Article 48 (Clause 1) of the VAT Law, taxpayers are no longer required to issue self-tax invoices when importing certain goods or services for business purposes. This change significantly reduces the administrative burden on businesses and simplifies VAT reporting.
For companies relying on professional VAT services in Dubai, this amendment helps streamline compliance processes and reduces documentation errors.
Five-Year Time Limit on Recoverable VAT
The updated Article 74 (Clause 3) introduces a clear five-year limit for carrying forward excess recoverable input VAT. Businesses must either claim a refund or utilize the excess VAT to offset liabilities within five years from the end of the relevant tax period.
If the excess input VAT is not used or claimed within this period, the right to recover it will permanently lapse. This change highlights the importance of working closely with experienced accounting firms in Dubai to regularly review VAT balances and avoid lost refunds.
Input VAT Recovery Linked to Tax Evasion
New provisions added to Article 54 strengthen the FTA’s authority to deny input VAT recovery where tax evasion is involved. Input VAT may be disallowed if the taxpayer knew, or should have known, that the transaction was linked to tax evasion, or if adequate supplier verification was not conducted.
This amendment places greater responsibility on businesses to enhance due diligence procedures—an area where expert accounting services in Dubai play a critical role.
Major Changes Under the UAE Tax Procedures Law
Time Limit on Use of Tax Credits and Overpayments
Under Article 9 (Clause 3), the FTA can now apply tax credits or overpayments only within five years from the end of the relevant tax period. After this period, unused credits can no longer be applied to outstanding liabilities.
This reinforces the need for accurate tax planning and timely reviews with trusted providers of VAT services in Dubai.
Revised Voluntary Disclosure Framework
The amendment to Article 10 (Clause 5) introduces two distinct methods for correcting tax errors: voluntary disclosure (only for cases specified by the FTA) and correction through the tax return for all other cases.
This change simplifies error correction and reduces compliance complexity, particularly for businesses supported by professional accounting firms in Dubai.
Five-Year Deadline for VAT Refund Applications
The revised Article 38 introduces a five-year deadline for submitting tax refund requests. Additional clauses provide extended timelines in specific situations, such as when credit balances arise close to or after the expiry of the five years.
Failure to meet these timelines will result in the loss of refund rights, making proactive tax management essential for businesses using accounting services in Dubai.
Expanded Audit and Assessment Powers
The updated Article 46 confirms a standard five-year statute of limitations for tax audits but introduces broader exceptions, particularly for refund-related cases. The FTA may conduct audits or issue assessments beyond five years, provided they are completed within two years of the refund application.
Businesses should ensure their records and documentation are well-maintained, especially when supported by expert VAT services in Dubai.
Transitional Relief and Additional Provisions
The new law provides transitional relief for taxpayers whose refund claim periods have expired or are about to expire. Eligible taxpayers may submit refund requests or apply credit balances within one year from the law’s effective date.
Additionally, voluntary disclosures linked to refund applications may still be submitted within two years, even if the standard five-year period has elapsed, subject to certain conditions.
How Anh Consultants Can Help
As one of the trusted providers of accounting services in Dubai, Anh Consultants offers comprehensive tax advisory and compliance solutions tailored to the latest UAE tax regulations.
Our services include:
- VAT compliance and advisory
- Tax refund and voluntary disclosure support
- Supplier due diligence and risk assessment
- Representation before the Federal Tax Authority
- Ongoing advisory aligned with the new 2026 tax laws
By partnering with Anh Consultants, businesses gain access to experienced professionals who understand the practical impact of these changes and provide reliable VAT services in Dubai to ensure compliance and minimize tax risks.