The UAE Ministry of Finance has issued Federal Decree-Law No. 16 of 2025, amending parts of the existing VAT law (Federal Decree-Law No. 8 of 2017). These changes will officially take effect from January 1, 2026.
Why this matters:
These updates are part of the UAE’s ongoing effort to simplify tax procedures, improve transparency, and align the VAT system with international standards.
Businesses will no longer be required to issue self-invoices when applying the reverse charge mechanism.
Instead, they must keep supporting documentation for transactions as specified by the Executive Regulation.
This reduces paperwork and makes compliance easier.
If a business has an excess refundable VAT amount after reconciliation, they now have a 5-year deadline to submit a refund request.
After this period ends, the right to claim that refund expires.
This change helps prevent old tax balances from lingering and improves financial clarity.
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