Starting January 1, 2026, the UAE will implement new VAT rules under Federal Decree‑Law No. 16 of 2025, revising the existing VAT regime.
businesses will no longer need to issue self-invoices under the reverse-charge mechanism — instead they simply retain normal supporting documents (invoices, contracts, etc.).
A five-year deadline is now set for claiming any refundable VAT or unused credits. After that, claims expire. This gives businesses clear timelines and helps avoid backlog of old claims.
The amendments also strengthen anti-evasion safeguards: the Federal Tax Authority (FTA) can deny input-tax deductions if a supply is found to be part of a suspicious chain, pushing companies to better vet suppliers.
Experts advise firms — especially those with past refundable balances — to audit their records and submit any pending claims before deadlines; due diligence on supply-chains is now more important than ever.