The UAE has marked another milestone in enhancing its taxation environment and solidifying its reputation as a dependable business hub globally. With the promulgation of Federal Decree-Law No. (17) of 2025, the UAE government has rolled out broad amendments to the Tax Procedures Law, which will become effective as of 1 January 2026. UAE new tax procedures amendments deal with clarifying refund procedures in a more precise manner, strengthening taxation audit powers in a limited scope, and adopting tax-binding authorities to shed light on taxpayers.
More notably, such tax reforms represent an added commitment by the UAE towards ensuring a higher degree of transparency, predictability, and conformity with international standards in tax administration. As the UAE continues with such developments in its federal tax system in light of establishing both Value added tax and Corporate Tax, such reforms go far in bringing a level of certainty in such tax systems. As such, all companies operating in such a UAE environment need to show awareness of how such reforms will impact them.
Overview of the Latest UAE Tax Regulations in 2026
The UAE new tax procedures incorporate a series of important articles of Federal Decree-Law No. 28 of 2022, which regulates taxation administration for all federal taxes within the UAE. Issued by UAE Ministry of Finance, this updated law will be equally applicable to:
- Corporate Tax
- Value Added Tax (VAT)
- Excise Tax
Through the implementation of standard timelines, improved delimitations, and better guidance systems, this makes compliance simpler and easier. This prone to tax disputes among taxpayers and the Federal Tax Authority. However, with these UAE new tax procedures, tax regulation in UAE is becoming more aligned with international best practices. Especially this connect with respect to audit time limits, refund rights, and interpretation.
Therefore, companies can look forward to a more systematic and predictable tax environment from 2026 onwards.
Easier Refund Deadlines for Better Financial Planning
Among the most far-reaching amendments is the addition of a five-year time limit for taxpayers to:
- To request a refund of a credit balance, or
- Use this balance to set off outstanding tax dues
The five-year time limit is uniform for all these taxes: VAT, Corporate Tax, and Excise Tax. Indeed, this is an important step forward compared with previous systems, in which cases for refund were not necessarily fixed.
Pragmatically, this constitutes a much-needed financial reality check. Companies with UAE new tax procedures can now time their in-house tax analysis, audits, and reconciliation. This all comes with a definite parliament-provided time frame. As such, cash forecasting will greatly improve, with minimal chances of companies missing out on their rightful refund money. Along with this comes payroll process due to a gray time frame.
Limited Flexibility for Late-Arising Claims
However, new legislation covers the fact that not all situations involving a refund can meet these standard time limits. Therefore, it brings in a degree of flexibility in such circumstances, such as:
- Refund claims arising late because of special or meritorious circumstances
- Credit balances arising during the last 90 days of the limitation period
Overall, through these exceptions, UAE new tax procedures achieve a balance in the UAE between administrative discipline and justice. Although authorities clearly dictate time limits, they do not deny a taxpayer’s rights simply because they fall within time limits.
Expanded Audit Powers in Clearly Defined Circumstances
A further important reform is in connection with powers of audit and assessment by the Federal Tax Authority.
As far as the amended Tax Procedures Law is concerned, the FTA is allowed to conduct an audit or make a tax assessment. After the standard limitation period but under specific circumstances. For instance, if a taxpayer requests a refund in the final year of a tax assessment. With more time may be required to check if such a claim is accurate and true.
The above UAE new tax procedures amendment is especially important for two major reasons:
- Protects public revenue through ensuring last-minute or high refund claims can be evaluated by FTA
- It assures certainty over non-compliant businesses with respect to unlimited or open-ended audit liability
In short, the UAE has enhanced the capacity for enforcement without impacting public confidence in taxpayers. Businesses with good record-keeping and a record of filing their returns on time will not face threats of indefinite retrospective audits.
The binding effect of tax interpretations
Perhaps the most far-reaching and proactive change brought in by these amendments is in respect of the FTA’s power to make official directions on the application of taxation laws.
Binding directions will be given for:
- Taxpayers, who will have to abide by the clarified standard, and
- The FTA itself, ensuring internal consistency in auditing, assessment, and decision-making
In the past, companies were left with ambiguity concerning tax laws, especially where VAT calculator and Corporation Tax were concerned. Such vagueness may have resulted in disputes over tax payments, slow refunding, or different results during an HR audit.
With this current guidance, achieving compliance is most likely predictable. Companies can now align their transaction structuring, pricing, and/ or reporting with relative ease, and such an event will most likely reduce disputes and/ or litigation. Therefore, this reform will definitely boost investor confidence, especially for multinational companies dealing with tax risk in different countries.
Transitional Relief for Older Refund Claims
To provide a transition into this new framework, lawmakers have introduced law providing Temporary Relief Provisions in refund claims. These provisions would otherwise have expired under existing law.
The government will give taxpayers a new one-year period, which will commence from 1 January 2026. Overall this will include feature to make a claim for a refund if:
- The original five-year refund period will have expired before this date, or
- The time frame during which a refund is possible will expire in one year after this law takes effect
Additionally, in cases where the FTA has not yet rendered a decision regarding such refund claims. Then taxpayers can make a Voluntary Disclosure within two years of making such a refund claim. Therefore, a claim with UAE new tax procedures for a bona fide refund right will be less likely to fall through when a transition occurs.
Applicability in all UAE Federal Taxes
Based on a As the Tax Procedures Law is considered to be a framework for tax in the UAE, such amendments have extensive consequences.
They have direct influence on UAE new tax procedures concerning:
- Corporate Tax under Federal Decree-Law No. 47 of 2022
- VAT Compliance, such as Registration, Filing, Record Keeping, Assessment, and Refunds
- Excise Tax, including statements of excise tax, excise tax collection, excise Therefore, all kinds of companies, including startups and giant conglomerates, will have to rethink their tax systems before 2026. Moreover, they will have to check their tax calendars and other tax systems to see if they conform to the new tax rules.
Strengthening Compliance While Facilitating Economic Growth
As explained in a press release by the Ministry of Finance, “The amendments have an objective that goes beyond improving procedural matters. They are part of an overall vision to update the UAE tax system and make it more supportive of a resilient economy over time.”
In particular, it is anticipated that the reforms will:
- Streamline red tape in business operations
- Enhance tax system transparency and predictability
- Improve operational efficiency in FTA
- Promote Sustainable and Diversified Revenues for the Government
- Enhance the UAE’s status in being a competitive global business platform As a follow-up to the implementation of Corporate Tax in 2023, such reforms can be considered a new stage in developing a full-fledged and internationally compatible tax administration system.
What Businesses Need to Do before January 2026
Due to the magnitude of these new amendments, it is important to have a check in before. Overall organizations must make necessary efforts to fall in line with this legislation when it takes effect.
Some key action points UAE new tax procedures include:
- Evaluation of credit balances and refund positions for all relevant taxes over time
- Updating in-house tax calendars to include the new five-year refund limitation
- Tracking FTA bulletins for mandatory income tax department directives and interpretational guidance
- Enhancement of documentation, record-keeping, and readiness for auditing
- Taking professional tax advice in relation to complex, high-value, or international transactions.
Through early preparation, companies can not only become and remain compliant with exemption but can also take full advantage of certainty and clarity introduced by this law.
Conclusion
UAE’s 2026 amendments to the Tax Procedures Law bring a more organized, transparent, and tax-friendly tax administration regime. With time-defined refunding rights, protected audit powers, binding tax authorities in tax views, and relief provisions in tax administration, tax-paper certainty and protection have increased. On the other hand, the government UAE new tax procedures enhances its capacity to collect taxes effectively and equally. Taken together, income tax return these measures will bring a less complicated and predictable tax system into effect, which will promote tax compliance and re-entrench the UAE’s reputation for being a stable and attractive hub for international companies.
At Zimyo, we are committed to keeping our clients and partners informed about key regulatory updates that impact businesses in the UAE and beyond. Understanding these changes now will help organizations streamline payroll, compliance, optimize cash flow, and reduce procedural risks as they navigate the evolving tax landscape.
Overall, for businesses operating in the UAE, proactive planning and timely action on refund claims and compliance requirements will be crucial to fully benefit from the new framework.
So, future-proof your operations with a demo and transform UAE compliance from a threat into a competitive advantage.
FAQs (Frequently Asked Questions)
The UAE has amended its UAE new tax procedures Law under Federal Decree-Law No. 17 of 2025, which came into effect in January 2026. It introduces defined timelines for refunds, limited extensions for audits, and binding interpretations of tax laws by the FTA.
The UAE tax regime includes 9% Corporate Tax (effective from June 2023), 5% VAT calculator, and Excise Tax. Recent reforms with UAE new tax procedures have focused on stronger administration, transparency, and better alignment with global tax standards.
Dubai follows the federal UAE tax laws, and thus there is no separate Dubai-only tax law. The changes equally apply in Dubai for the amended Tax Procedures Law, 2025-2026.
Invoices under VAT shall contain compelling information such as TRN, the amount of tax, date of supply. The FTA gives a lot of emphasis on electronic invoicing and bookkeeping.
Minimum Turnover for VAT Registration in the UAE The Mandatory VAT registration applies when the taxable turnover exceeds AED 375,000 annually. This UAE new tax procedures means that voluntary VAT registration is allowed once turnover crosses AED 187,500.
It should be underlined that there is no official “AED 3,000 tax rule” under UAE VAT law. The commonly applicable threshold is AED 10,000 for issuing a simplified tax invoice.
