Latest UAE tax compliance updates

 

1. Major 2026 Tax Procedure & VAT Overhaul

– The UAE has issued significant amendments to the Tax Procedures Law and VAT Law effective 1 January 2026, which harmonise compliance rules across VAT, Corporate Tax, and Excise Tax, creating a unified statutory framework for audits, refunds, and record-keeping. These reforms tighten due diligence standards and standardise audit procedures across taxes.

2. Five-Year Limits on Refunds, Credits & Audits
– New statutory time limits have been introduced, including five-year windows for VAT refund claims and for the Federal Tax Authority’s ability to conduct audits or apply excess credits, significantly impacting long-term tax planning and record retention.

3. E-Invoicing Roll-Out Requirements
– Mandatory e-invoicing for eligible businesses is being phased in by July 2026. This moves compliance from periodic filings to real-time digital reporting, requiring structured invoice data via accredited service providers.

4. VAT Law Amendments
– Changes to the VAT framework include:
• No more self-invoicing under the reverse charge mechanism in certain cases.
• Introduction of a five-year limitation period to utilise or claim VAT credits/refunds.
• Greater emphasis on due diligence and legitimacy verification before input tax recovery.


5. Corporate Tax Compliance Continues to Mature
– The UAE corporate tax regime remains in force (applicable for financial years starting on or after 1 June 2023) with ongoing updates, particularly relating to depreciation rules, property tax treatment, and transfer pricing readiness.

6. Federal Tax Authority Fee & Service Changes
– Amendments to FTA service fees and administrative procedures took effect 1 January 2026, affecting registration, filings, and compliance interactions with tax authorities.

7. Revised Administrative Penalties & Disclosure Protocols
– Recent cabinet decisions revise administrative tax penalties and clarify voluntary disclosure requirements for errors that do not affect tax due, supporting clearer compliance pathways.

8. Simplification of Economic Substance Rules
– While traditional ESR filings have been phased out in some contexts, underlying economic substance considerations are now embedded within corporate tax compliance requirements for relevant activities.

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