Starting January 1, 2026, the UAE introduces major tax reforms including a five-year limit on VAT refunds, stricter anti-evasion rules, and a shift to free digital tax certificates.
These updates, approved via Cabinet decisions and Federal Decree-Law No. 17 of 2025, simplify VAT refund claims with a one-year extension to December 31, 2026, for historical credits while empowering the Federal Tax Authority (FTA) to deny deductions linked to fraud[3][5][9][11]. Businesses face new fees for Unilateral Advance Pricing Agreements, but paper certificate costs are eliminated in favor of free electronic versions[7]. Enhanced compliance frameworks cover corporate tax, VAT reverse-charge mechanisms, and expanded audit periods up to 15 years, alongside e-invoicing rollout and clearer procedures for error corrections[5][9][11].
What this means
UAE entrepreneurs should review VAT credit balances and supplier due diligence immediately to secure refunds before deadlines and avoid penalties. These changes promote transparency and cost savings, enabling focus on growth amid digital transformation.