United Arab Emirates: VAT Law Amendments to
Take Effect from January 2026

The UAE Ministry of Finance has announced the issuance of Federal Decree-Law No. (16) of 2025 amending certain provisions of Federal Decree-Law No. (8) of 2017 on Value Added Tax. The amended provisions will enter into force on 1 January 2026 and form part of the UAE’s ongoing efforts to develop its tax system and enhance administrative and regulatory efficiency.

Key amendments at a glance

In summary, the amendments focus on three main areas:

• Removal of the requirement to issue self-invoices under the reverse charge mechanism, coupled with an obligation to retain supporting documentation for the supplies.
• Introduction of a five-year time limit for submitting refund requests for excess refundable tax after reconciliation.
• Granting the Federal Tax Authority the power to deny input tax deduction where a supply is found to form part of a tax-evasion arrangement.

Simplifying Procedures and Ensuring Transparency
The amendments are designed to simplify tax procedures for taxable persons while reinforcing transparency and alignment with international standards. Under the new rules, taxable persons will no longer be required to issue self-invoices when applying the reverse charge mechanism. Instead, they must retain supporting documentation relating to the underlying supplies, as specified in the Executive Regulation. This reduces procedural burdens, streamlines administration and provides clear audit evidence.

The amendments also introduce a five-year time limit for submitting requests to reclaim any excess refundable tax after reconciliation has taken place. Once this period has expired, the right to reclaim the tax is lost. This prevents the accumulation of outdated balances, strengthens financial certainty and supports fairness among taxpayers in line with international good practice for refund management and balance reviews.

Strengthening Governance and Combating Tax Evasion
As an additional measure to combat tax evasion, the amendments empower the Federal Tax Authority (FTA) to deny the deduction of input tax where it determines that the supply forms part of a tax-evasion arrangement. Taxable persons are required to verify the legitimacy and integrity of supplies before deducting input tax, in line with the procedures and measures set out by the FTA. This approach reinforces shared responsibility along the supply chain, strengthens governance and safeguards public revenues.

https://mof.gov.ae/en/news/ministry-of-finance-to-implement-vat-law-amendments-starting-january-2026/