UAE Tightens Tax Rules with New Refund Deadlines and Longer Audit Windows in 2026

The United Arab Emirates (UAE) has revised its tax procedures to increase clarity and improve compliance. Through Federal Decree-Law No. 17 of 2025, which modifies Federal Decree-Law No. 28 of 2022 on Tax Procedures, the government introduced new rules that took effect on 1 January 2026. These amendments apply to all businesses that are dealing with the Federal Tax Authority (FTA) regarding VAT, Corporate Tax, and Excise Tax.

The changes concern two main points: 

• Imposing stricter time limits for claiming tax refunds and 
• Extending the period during which the FTA may carry out audits. 

Knowing about these changes can help companies in Dubai and other Emirates recover overpaid tax amounts and prepare for FTA audits. 

New Five-Year Deadline for UAE Tax Refund Claims

A major change is that there is now a clear time limit applicable to tax refunds and credit balances.

Any business that has a credit balance with the FTA must make a refund request within five years of the end of the tax period in question. This five-year rule covers:

• Overpayments, 
• Balances resulting from tax returns, 
• Voluntary disclosures, and 
• All other valid credit amounts. 

However, if the claim is not submitted within that time frame, the right to get the money back or to use the credit expires.

Exceptions to the 5-Year Tax Refund Limit

Businesses typically need to make a UAE tax refund claim within five years of the end of the tax period. There are specific exceptions to this rule:

Credit arising from an FTA decision

If the credit balance results from a decision issued by the Federal Tax Authority (FTA) after the five-year period has expired, or during the last 90 days of that period, the taxpayer has one year from the date the credit balance arose to submit the refund claim.

Other cases

In all other situations where the credit balance arises after the five-year period has expired, or during the last 90 days of that period, the taxpayer has only 90 days from the date the credit balance arose to submit the refund claim.

Transitional Window for Older Credit Balances Until 31 December 2026

The UAE has provided transitional relief for businesses holding tax credit balances (including VAT and other taxes).

Taxpayers whose five-year period for claiming a refund has already expired before 1 January 2026, or will expire within one year from that date, may still submit a refund request or use the credit balance to settle outstanding tax liabilities and administrative penalties.

To benefit from this relief, the request must be submitted no later than 31 December 2026.

Steps for Businesses

Check your EmaraTax account for unused credits and submit any refund claims before the deadline. It’s best to start early, as the Federal Tax Authority (FTA) may ask for documents to support your claim.

Voluntary Disclosures

If relevant, businesses may submit a related voluntary disclosure within two years of filing the refund application, as long as the FTA has not yet decided on the claim. 

Longer Audit Windows and Extended Review Periods

The FTA generally has five years from the end of a tax period to carry out an audit. For most businesses, this is the applicable time limit.

The review period can be extended in some cases:

• For tax evasion or failure to register for tax, the FTA may conduct an audit or issue a tax assessment for up to 15 years.
• If a business submits a refund claim in the fifth year of the limitation period, or under transitional rules, the FTA has an additional two years from the date of the claim to review it.

Businesses must keep tax and VAT records, along with supporting documents, accurate and accessible for an appropriate period. Consider keeping them longer if the business has past tax issues or has filed a refund claim. 

Practical Steps Every UAE Business Should Take Now

To comply with the new regulation and ensure recovery of the recoverable amount, businesses must:

• Conduct a thorough analysis of all credit balances that exist with respect to EmaraTax concerning VAT, Corporate Tax, and Excise Tax.
• Check whether those balances fall within the framework of the five-year rule and the transitional period until 31 December 2026.
• Collection of sufficient documentation to prove your case, including tax invoices, returns, payment proofs, and reconciliation statements.
• Filing of a transitional refund claim well in advance of the deadline.
• Make sure that tax registration is done correctly and in compliance with the regulations.

The sooner, the better, to avoid loss of claims and prepare for an FTA audit.

How the New Rules Affect Corporate Tax, VAT and Excise Tax

The new UAE Tax Procedures Law is applicable to Corporate Tax, VAT and Excise Tax. Companies should be aware of the revised time limit of five years for submitting tax refund claims and of extended FTA audit periods in specific circumstances. Well-kept tax records and deadlines are critical for compliance.

Protect Your Business with Professional Assistance from BUSINESS TAX IN THE UAE (BTU)

Timely compliance action is now more important than ever under the new UAE tax regulations. For assistance with VAT recovery, Corporate Tax returns, Excise Tax compliance, tax audits, or FTA disputes, BTU can represent your interests.

The BTU tax professionals can assist you in evaluating tax credits, complying with refund deadlines, and complying with the latest UAE tax laws. Get in touch with Business Tax UAE (BTU) today to secure your refund rights and take control of your tax liabilities.