UAE Tax Procedure Changes Coming in 2026: What Businesses Need to Know
From 1 January 2026, the UAE will introduce major updates to tax procedures that will significantly impact how businesses manage VAT, refunds, compliance, documentation, and even research & development incentives. These changes fall under Federal Decree-Law 17 of 2025, which amends previous tax procedure laws to create a more transparent and globally aligned tax system. At TFAB Financial & Business Consultancy, our goal is to help businesses navigate these changes confidently and stay compliant every step of the way. This blog breaks down the new rules, what they mean for your business, and how TFAB can support you during the transition.
A New 5-Year Window for Tax Refunds and Credits
One of the biggest updates is the introduction of a fixed five-year period for businesses to request refunds on tax credit balances — such as excess VAT paid. This ensures businesses now have clear deadlines and can plan their finances more efficiently.
Why it matters:
- More certainty on when you must file refund requests
- Reduced risk of losing eligible credits
- Better long-term tax planning
Transitional Relief for Old Tax Credits
If your business has expired tax credit refunds — or if the refund period is set to expire within one year of January 2026 — you now get a one-year grace window to file claims. This is a valuable opportunity for businesses to recover funds they may have thought were lost.
Simplified VAT Procedures
Businesses using the reverse-charge mechanism will no longer need to create self-invoices.
Instead, standard invoices and supporting documents are sufficient.
This reduces:
- Administrative burden
- Time spent on VAT compliance
- Paperwork complexity
Stricter Compliance & Audit Rules
The FTA’s audit powers have been expanded. In certain cases, the authority can conduct audits or assessments even after limitation periods have passed. Additionally, input-tax deductions may be denied if transactions are linked to tax-evasion schemes.
Businesses must now ensure:
- Stronger documentation
- Accurate transaction records
- Robust due diligence across supply chains
New R&D Tax Credit (30–50%) – A Major Incentive
A standout update is the introduction of a refundable R&D tax credit of 30–50% on eligible research and development expenses.
This is a major opportunity for businesses investing in:
- Technology innovation
- Product development
- Process improvements
- Scientific research
Businesses should start documenting R&D activities now to benefit from this incentive from 2026 onwards.
What Do These Changes Mean for UAE Businesses?
Overall, the UAE is moving toward a more:
- Predictable tax environment
- Transparent compliance system
- Investment-friendly structure
These updates align the UAE with global tax standards—especially beneficial for companies planning long-term growth in the region.
What Your Business Should Do Now
To stay ahead of the 2026 deadline, businesses should:
Review VAT and tax credit balances
Identify outstanding refunds and plan claims.
Clean up documentation
Ensure invoices and all supporting documents meet compliance requirements.
Evaluate R&D activities
Start tracking any innovation-related expenses that may qualify for tax credits.
Strengthen compliance processes
Avoid penalties and ensure your supply chain is fully transparent.
Consult with experts
Navigating new tax rules can be complex — and that’s where TFAB can support you.
How TFAB Can Support You Through These Changes
At TFAB Financial and Business Consultancy, we provide end-to-end support to ensure your business stays fully compliant while maximizing tax benefits.
- Tax Compliance Review : Identify gaps and align your processes with the 2026 rules.
- Refund Claim Assistance : We help prepare and submit refund applications before deadlines.
- Documentation & Audit Preparation : Build strong, audit-ready records to avoid penalties.
- R&D Tax Credit Advisory : Optimize your innovation expenses to benefit from the new R&D incentives.
- Strategic Tax Planning : Ensure your business remains financially efficient and compliant.
Final Thoughts
The upcoming 2026 UAE tax procedure reforms offer both opportunities and challenges. Businesses that prepare early can benefit from clearer compliance rules, easier refund processes, and significant new tax incentives such as the R&D credit. If you want expert guidance tailored to your business, TFAB is here to support you every step of the way. Contact TFAB today to review your tax position and prepare for the upcoming regulatory changes.