The UAE Ministry of Finance announces new amendments to the Federal Tax Procedures Law, setting clear timelines for tax credit refunds and enhancing transparency starting January 1, 2026.

The UAE Ministry of Finance has officially announced the issuance of Federal Decree-Law No. (17) of 2025, which introduces amendments to specific provisions of Federal Decree-Law No. (28) of 2022 concerning tax procedures. This move reflects the UAE’s ongoing efforts to strengthen the efficiency of its tax system while reinforcing transparency, fairness, and regulatory clarity. The amendments are scheduled to come into effect on January 1, 2026.

These legislative changes aim to establish a clearer and more structured legal framework governing tax obligations and procedural requirements. A key aspect of the amendment involves regulating the time frame for submitting requests to recover tax credit balances from the Federal Tax Authority, or utilizing such balances to offset future tax liabilities. Under the new provisions, taxpayers are granted a maximum period of five years from the end of the relevant tax period to submit a refund application.

At the same time, the law introduces additional flexibility in certain specific cases. If the tax credit arises after the five-year period has elapsed, or within the last 90 days of that period, taxpayers may still be allowed to submit a refund request, subject to defined conditions. These measures are designed to safeguard the rights of both residents and citizens while ensuring greater financial certainty and procedural fairness.

Furthermore, the amendments expand the statute of limitations provisions, enabling the Federal Tax Authority to conduct tax audits or issue tax assessments even after the limitation period has ended, in specific scenarios - particularly where a refund request has been submitted during the final year of the limitation period. This approach aims to maintain a balanced framework between protecting taxpayer rights and securing government revenue.

Another significant update grants the authority the power to issue official and binding guidelines regarding the application of tax laws to various transactions. These binding instructions will help unify interpretations, minimize inconsistencies, and reduce potential compliance risks.

Transitional provisions have also been introduced, allowing taxpayers with existing credit balances whose five-year limitation period ended before January 1, 2026, or is set to expire within one year from that date, to submit refund requests within one year from the law’s effective date. Additionally, voluntary disclosures related to such requests may be submitted within two years if no official decision has yet been issued.

The Ministry of Finance affirmed that these amendments are aligned with international best practices and are expected to significantly enhance the UAE’s business environment, increase investor confidence, reduce administrative burdens, and ensure the sustainability of public revenues - all while supporting continued economic growth.