The Ministry of Finance has issued Federal Decree-Law No. 16 of 2025, introducing amendments to Federal Decree-Law No. 8 of 2017 on Value Added Tax. The updated provisions will take effect on January 1, 2026.
The ministry said the changes are part of the UAE’s continued efforts to strengthen its tax framework and improve administrative and regulatory efficiency.
The amendments seek to simplify procedures for taxpayers while aligning compliance requirements with international standards.
Under the revised rules, taxable persons will no longer be required to issue self-invoices when applying the reverse charge mechanism. Instead, they must keep supporting documents related to supply transactions as outlined in the Executive Regulation.
The ministry said this step reduces procedural burdens, enhances administrative efficiency, and provides clearer audit trails.
The amendments also introduce a five-year limit for submitting requests to reclaim excess refundable tax after reconciliation. Claims filed after this period will no longer be accepted. The ministry noted that the measure prevents the accumulation of outdated balances, increases financial certainty, and promotes fairness among taxpayers.
To further curb tax evasion, the law grants the Federal Tax Authority the power to deny input tax deductions if a supply is found to be linked to a tax-evasion arrangement.
Taxpayers must verify the legitimacy of supplies before claiming input tax, in accordance with FTA procedures. This requirement reinforces shared responsibility within the supply chain and safeguards public revenue.
The Ministry of Finance said the amendments support the UAE’s efforts to maintain a fair, transparent, and efficient tax environment, strengthen the sustainability of public finances, and enhance the competitiveness of the national economy.
