New UAE tax rules: What the changes really mean, who they benefit

Dubai: The UAE introduced a fresh round of updates to its Tax Procedures Law. Federal Decree-Law No. 17 of 2025 amends the existing Tax Procedures Law (Federal Decree-Law No. 28 of 2022), and the new rules will take effect on January 1, 2026.

The aim is straightforward: tighten the system, reduce ambiguity, and give both taxpayers and the Federal Tax Authority (FTA) a clearer framework to work within.

Refund deadlines clarified

The biggest changes deal with credit balances—cases where a business has paid more tax than it owes. The updated law sets a clear five-year window from the end of the relevant tax period to request a refund or use that credit to settle other tax liabilities. This is the first time the timeframe has been defined so precisely.

There’s also built-in flexibility. In specific situations laid out in the amendment, taxpayers can still submit refund requests after the five-year period has run out, or within the final 90 days before it expires. The idea is to avoid shutting out legitimate claims simply because the timing was tight.

Audit rules expanded

The amendment also tackles the question of when the FTA can still review a taxpayer’s records. The Authority will be allowed to conduct an audit or issue a tax assessment even after the usual limitation period has ended—but only in defined circumstances.

One example is when a business files a refund request during the last year of the limitation period. This gives the FTA room to confirm the accuracy of that claim while still keeping the boundaries of the audit period clear for everyone else.

New binding directions

Another notable change is the FTA’s new power to issue binding directions. These directions apply both to taxpayers and to the FTA itself when interpreting how the tax laws apply to specific transactions.

It’s meant to solve a long-standing issue: different cases sometimes being treated differently because the law can be read in more than one way. With binding directions, businesses should see more consistency and less uncertainty when planning or documenting transactions.

Relief for older refunds

The law also includes special temporary rules to deal with older refund claims. If a taxpayer’s five-year period to request a refund has already expired before January 1, 2026, or is due to expire within the year after that date, they get a new one-year window starting January 1, 2026 to file a refund request.

There’s an extra layer of flexibility too. If the taxpayer submits one of these old refund requests and the FTA hasn’t issued a decision yet, they’ll have two years from the date of filing to submit a Voluntary Disclosure to correct any past errors linked to that claim.

Applies to all UAE taxes

It’s worth remembering that the Tax Procedures Law isn’t just about corporate tax. It’s the backbone of the UAE’s entire tax administration system. It defines the procedural rules for registration, filing, audits, disputes, and penalties for all federally administered taxes, including:

• Corporate Tax under Federal Decree-Law No. 47 of 2022.

• Value Added Tax, covering registration, tax returns, record-keeping, and auditing.

• Excise Tax, including administration and collection.

In practice, this means the amendments will affect any business that interacts with the FTA, regardless of the type of tax.

What taxpayers gain

The changes introduce more structure, clearer rights, and better-defined timelines.

• Taxpayers get a predictable five-year refund window, the option to correct older issues under set conditions, and greater clarity through binding directions.

• The FTA gains tools to protect public revenue and ensure consistent application of the law.

Altogether, the amendments aim to make the UAE’s tax environment more transparent, reliable, and easier to navigate—while still maintaining safeguards over public funds.