The Finance Ministry has issued new amendments on the tax procedures law, setting new deadlines for requesting refunds for credit balances and granting the Tax Authority new powers, state news agency Wam reports. The Ministry has also introduced amendments on selected provisions to the UAE VAT law, according to KPMG. Both amendments come into effect at the beginning of 2026. The key changes:

Taxpayers now have a maximum of five years to request a refund for credit balances or to offset tax liabilities with a credit balance, according to Wam. You can still submit a request past the five-year limit if the balance arises late in the period or if after it has elapsed.

A grace period of one year is introduced for taxpayers with an old credit balance, where the five-year claim window has expired before 1 January 2026 or will expire within one year of the same date, to file for tax refund. “This effectively means that businesses with outstanding refund balances now have until 31 December 2026 to claim any refunds for the tax years 2018-2020,” KPMG said in its note.

A new exception allows voluntary disclosures related to refund applications up to two years after the original application was filed, if the authority has not made a decision on it.

As for the VAT law, taxpayers are now no longer required to issue a tax invoice to themselves when importing specific goods or services for their businesses in a bid to simplify administrative procedures, according to KPMG.

A new five-year limit has also been imposed for refund claims on excess recoverable input tax, and if it was not utilized or claimed within this period, the right to the tax expires.

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