UAE tax rule changes from 2026: 5 major updates businesses need to know

The UAE will implement major updates to its tax procedures from January 1, 2026, designed to make the system clearer, fairer, and more predictable for businesses.

The amendments focus on simplifying refund timelines, strengthening transparency, and ensuring consistent application of tax rules. By offering clearer deadlines, transitional relief for older credit balances, and structured guidance from the Federal Tax Authority (FTA), the changes aim to reduce administrative burdens and enhance financial certainty.

1. Clearer rules for refunds

The new law sets a maximum five-year window to request a refund of any tax credit balance or use it to settle outstanding liabilities.

Benefits for residents and businesses:

• Greater predictability in managing tax credits

• Clear deadlines to avoid missed refunds

• Flexibility if credit arises late or within the final 90 days

2. More certainty during tax audits

The FTA can now conduct audits or issue assessments even after the usual limitation period in certain cases, such as refund requests filed in the last year.

What this means for taxpayers:

• Stronger protection if a refund is still pending

• Fair treatment of late-period cases

• Continued checks to safeguard the state’s financial interests

3. Consistent guidance for all

The FTA can issue official, binding directions on applying tax laws, ensuring consistent interpretation.

Advantages for residents and businesses:

• Unified understanding of tax rules

• Reduced risk of errors

• Simpler, more consistent procedures across sectors

4. Transitional relief for older credit balances

Taxpayers whose five-year period for credit balances has expired—or ends within a year of January 1, 2026—can submit refund requests within one additional year. Voluntary disclosures can also be filed within two years if no decision has been issued.

Benefits:

• Second chance to claim old credits

• Fair treatment of pending or delayed cases

• Greater financial clarity going forward

5. Why it matters

The Ministry of Finance says the amendments strengthen transparency, fairness, and efficiency in the UAE’s tax system. For residents, investors, and businesses, the changes aim to:

• Reduce administrative burdens

• Boost confidence in tax procedures

• Support a predictable, competitive business environment

• Align UAE tax practices with international standards