UAE Tax Updates 2026: VAT, Corporate Tax & Tax Procedures Law Developments
Introduction
The UAE tax framework continues to evolve as part of the government’s commitment to transparency, international compliance standards, and digital transformation. In 2026, significant updates have been introduced through Federal Decree-Law No. 16 of 2025 (VAT Law Amendments) and Federal Decree-Law No. 17 of 2025 (Tax Procedures Law Amendments), along with updated guidance issued by the Ministry of Finance UAE and the Federal Tax Authority (FTA).
1. Tax Procedures Law Amendments (Effective 1 January 2026)
Federal Decree-Law No. 17 of 2025 introduces important procedural reforms aimed at strengthening tax compliance and legal certainty.
- Five-year statute of limitation for tax refund claims and assessments.
- Clearer voluntary disclosure rules to distinguish rectifiable errors from reportable discrepancies.
- Enhanced audit powers and structured timelines for FTA assessments.
- Requirement to retain proper accounting and tax documentation for at least five years.
2. UAE VAT Law Amendments 2026
Federal Decree-Law No. 16 of 2025 amends provisions of the UAE VAT Law (Federal Decree-Law No. 8 of 2017). These amendments refine refund procedures, reverse charge mechanisms, and compliance enforcement.
- Five-year deadline for VAT refund claims on excess recoverable input tax.
- Simplified reverse charge documentation requirements.
- Stronger anti-evasion rules allowing denial of input tax where evasion is suspected.
- Alignment of VAT limitation rules with the updated Tax Procedures Law.
3. UAE Corporate Tax – Second Year Compliance (2026)
- Accurate preparation of financial statements in accordance with applicable accounting standards.
- Transfer pricing documentation where related-party transactions exist.
- Free Zone 0% eligibility assessment for Qualifying Free Zone Persons.
- Review of expense classification and taxable income adjustments.
- Retention of documentation supporting Corporate Tax return filings.
Corporate Tax rates remain 0% on qualifying income (subject to Free Zone conditions) and 9% on taxable income exceeding AED 375,000.
4. UAE E-Invoicing and Digital Compliance Developments
The UAE is progressing toward structured electronic invoicing. Businesses are advised to assess ERP system readiness, review invoicing formats, and align digital accounting systems with anticipated regulatory requirements.
Impact on UAE Businesses
The 2026 tax developments increase audit scrutiny, impose strict refund deadlines, and enhance documentation requirements. Businesses should conduct VAT health checks, Corporate Tax reviews, and compliance audits to mitigate risk.
How Accruon Auditing LLC Can Assist
Accruon Auditing LLC supports businesses with reliable and compliant audit services tailored to local regulations. As a government approved audit firm in Dubai, we help organizations meet statutory requirements, maintain financial transparency, and strengthen stakeholder confidence. Our experienced team ensures accurate reporting, timely audits, and practical insights that support informed business decisions.
We will assist in
- Corporate Tax compliance and return filing
- VAT review and refund optimization
- Free Zone 0% eligibility assessment
- Transfer pricing documentation support
- Audit-ready financial statement preparation
- Comprehensive tax health checks aligned with Ministry and FTA guidelines
Frequently Asked Questions (FAQ)
Q1 :-What is the VAT refund deadline in UAE?
Ans :-Five years from the relevant tax period.
Q2 :-What is the Corporate Tax rate in UAE?
Ans :-0% on qualifying income and 9% above AED 375,000.
Q3 :-When will e-invoicing become mandatory?
Ans :-Phased rollout beginning mid-2026.
Q4 :-How long must tax records be retained?
Ans :-Minimum five years under the Tax Procedures Law.