New Delhi: The UAE government is set to apply some major updates to its tax system from January 1, 2026, aiming to make the rules clearer, fairer, and easier for businesses and residents. The changes are made to simplify refund procedures, increase transparency, and reduce administrative burdens, giving companies and individuals free hand in planning their finances.
Under the new rules, taxpayers can request refunds or use tax credits to settle liabilities within a maximum five-year window, making it easier to manage finances and avoid missing refunds. Special flexibility is also provided for credits that arise late in the year.
The Federal Tax Authority (FTA) will have the power to conduct audits or issue assessments even after the usual limitation period in certain cases, such as pending refunds. Officials say this ensures fairness while protecting the state’s financial interests.
‘It will reduce paperwork’
Another key update allows the FTA to issue binding guidance on how tax laws should be applied. This aims to reduce confusion, lower the risk of errors, and make procedures consistent across different sectors.
Businesses with older credit balances that have expired or that will expire within a year of 2026 will get an extra year to submit refund requests. Voluntary disclosures can also be filed within two years, giving companies a second chance to claim pending credits and plan more clearly for the future.
According to the Ministry of Finance, these updates will strengthen transparency, fairness, and efficiency in the UAE’s tax system. They are expected to reduce paperwork, improve confidence in tax procedures, and support a predictable, competitive business environment, while aligning UAE practices with international standards.
The government says these changes will benefit residents, investors, and businesses, creating a simpler and more reliable tax framework as the UAE continues to attract global investment.