The UAE’s Ministry of Finance has announced a new set of amendments to the country’s VAT law, with the revised rules taking effect on January 1, 2026. The changes are designed to make the tax system easier to use and more aligned with international best practices.
In a statement, the Ministry said the move supports the UAE’s ongoing efforts to streamline its tax framework and improve administrative efficiency. The updates are also designed to provide businesses with greater clarity and reduce unnecessary paperwork.
Simpler filing, fewer steps
One of the biggest changes removes the requirement for businesses to issue self-invoices when using the reverse charge mechanism. Instead, companies will simply need to keep the usual documents that support their transactions, such as invoices, contracts and records, which the Federal Tax Authority (FTA) can review when checking compliance.
According to the Ministry, this adjustment “enhances administrative efficiency” and provides clear audit evidence without placing extra paperwork burdens on businesses.
Five-year window for VAT refunds
The updated law also introduces a five-year limit for claiming back refundable VAT after accounts have been reconciled. Once this period ends, businesses lose the right to submit a claim. Officials say this helps prevent long-delayed refund requests and gives taxpayers more certainty about their financial position.
Tighter rules on tax evasion
To protect the system from misuse, the FTA will now have the authority to deny input tax deductions if a transaction is found to be linked to a tax-evasion arrangement. This means businesses must ensure the supplies they receive are legitimate before claiming input VAT.
Taxpayers are expected to verify the “legitimacy and integrity” of supplies as part of these strengthened safeguards.
Supporting a competitive economy
The Ministry said the amendments will boost transparency, ensure fairness across the tax system and support better management of public revenue. The updated rules also aim to maintain the UAE’s competitive edge while supporting long-term economic sustainability.
