UAE Ministry Of Finance To Implement Key Amendments To Tax Procedures Law Starting January 2026

The Ministry of Finance has revealed changes to Federal Decree-Law No. (17) of 2025, which amends certain parts of Federal Decree-Law No. (28) of 2022 concerning Tax Procedures. These updates are part of the UAE's ongoing efforts to improve tax system efficiency and ensure transparency and fairness in tax dealings. The revised law will be effective from 1 January 2026.

The amendments aim to create a clearer legal framework for tax duties and procedures, including setting timelines for requesting refunds from the Federal Tax Authority (FTA). This provides clarity on the rights and responsibilities of taxpayers and the FTA, enhancing financial discipline.

A key change is the introduction of a five-year limit from the end of the relevant tax period for requesting credit balance refunds or using them to settle tax liabilities. This timeframe helps organise financial processes while allowing flexibility for refund requests if the credit balance arises after this period or within its last ninety days in specific cases.

The amendments also expand provisions related to limitation periods, allowing the Authority to conduct audits or issue assessments after this period in certain situations, such as refund requests made in the final year. This ensures a balance between protecting taxpayer rights and safeguarding state financial interests.

Additionally, the amendments empower the Authority to issue official directions regarding tax legislation application without affecting existing laws. This aids practical implementation, unifies interpretation, and reduces risks from inconsistent case handling.

Transitional provisions allow taxpayers with expired five-year credit balances before 1 January 2026 or expiring within a year from that date to submit refund requests within one year from 1 January 2026. They can also file voluntary disclosures related to these requests within two years if no decision has been made by the Authority.

Aligning with International Practices

The Ministry of Finance stated that these changes align with international best practices, improving tax system efficiency and enhancing business environments by building trust and transparency while reducing administrative burdens. This supports sustainable public revenues and promotes economic growth.

With inputs from WAM