The UAE has introduced key amendments to its VAT law via Federal Decree-Law No. 16 of 2025, effective January 1, 2026, aimed at simplifying procedures and enhancing compliance.
These changes include streamlined reverse-charge filing, a five-year deadline for VAT refunds, and stricter rules against tax evasion, such as denying input tax deductions for suspicious transactions. The Ministry of Finance states these reforms reduce paperwork, promote transparency, and align with global standards, supporting economic growth while placing greater due diligence on businesses to verify suppliers. For UAE companies, this means easier tax administration but heightened responsibility in transaction oversight to avoid penalties.
What this means
UAE business owners should review supplier contracts and update compliance processes now to leverage simplified filings and secure input tax claims—potentially saving time and costs in the new 9% corporate tax environment.