UAE tax rules are set to change soon; here's what you should know

The UAE finance ministry has introduced changes in the tax rules, which will take effect on January 1.

Pointing out that the amendments are in line with UAE's efforts to ensure that the country's financial policies follow international best practices. The changes are expected to make the tax system efficient while improving business confidence, ease bureaucratic delays and and support sustainable public revenues to promote economic growth.

The ministry issued Federal Decree-Law No. (17) of 2025, which amends certain provisions of an earlier law introduced in 2022.

The changes will set a clear legal framework for tax procedures. Now taxpayers will have five years from the relevant tax period to request refunds of credit balances from Federal Tax Authority (FTA) or use it to pay taxes. This will not only ensure the rights of taxpayers but also the entitlements of the FTA.

However, there are exceptions. In certain cases, if the credit balance arises after the five-year period or 90 days before the deadline ends, taxpayers could be allowed to submit requests.

The latest amendment will enable the FTA to conduct audits and issue assessments after the five-year period expires. The FTA can also issue binding directions on the application of the tax law concerning the taxpayers as well as the tax authority itself. The government believes this will reduces inconsistencies.

However, there are some leeways given to taxpayers during the transition period. Taxpayers whose credit balances expired before January 1, 2026 or within one year from the date can seek refunds before January 1, 2027.