Federal Decree-Law No. 16 of 2025 amended the UAE VAT law with effect from 1 January 2026, alongside changes to the Tax Procedures Law. Most of the changes are about documents and time limits, which makes them bookkeeping issues as much as tax issues.
1. No more self-invoices under the reverse charge
When you import services or certain goods and account for VAT under the reverse charge, you no longer need to issue a self-invoice. You must still keep the supporting documents, such as the supplier’s invoice and the contract, that the Executive Regulation requires. If the supplier’s paperwork is weak, keep your own record that shows how you calculated the VAT.
2. A five-year limit on excess input tax
Excess recoverable input tax can now only be claimed as a refund or offset within five years. Balances older than that are lost. Many businesses carry credits forward for years without looking at them, so this is the change most likely to cost money.
The transitional deadline: 31 December 2026
If your five-year window has already passed, or ends within a year of 1 January 2026, the transitional rule gives you until 31 December 2026 to submit the refund request. After that, the old credits cannot be recovered.
3. The FTA can deny input tax linked to evasion
Input tax can be refused where a purchase is part of a tax-evasion arrangement and you knew, or should have known, about it. In practice this means checking new suppliers’ TRNs, keeping proof that goods or services were actually received and paying through traceable channels.
What to do before the year ends
- Reconcile your VAT control account against the balances shown on EmaraTax
- List any excess input tax older than four years and decide whether to request a refund before 31 December 2026
- Update your reverse-charge process so the file holds the supplier invoice, contract and calculation
- Add a TRN check to your supplier onboarding
- Review whether past returns need a voluntary disclosure before you file a refund request
Need help?
SMAS Venture can reconcile your VAT accounts, identify recoverable credits and prepare refund requests or voluntary disclosures. Book a free consultation.
