The UAE Ministry of Finance has confirmed a series of significant updates to the country’s Value Added Tax framework, set to take effect on January 1, 2026. The reforms are designed to streamline compliance procedures, strengthen governance across supply chains, and better align the national tax system with leading global standards.
A central component of the revision is the removal of mandatory self-invoicing under the reverse charge mechanism. Instead, businesses will rely on traditional supporting documentation such as supplier invoices and contractual records. Authorities say this shift will reduce administrative complexity for companies while providing clearer, more reliable audit trails.
Another notable change introduces a five-year cut-off period for businesses to submit VAT refund claims after reconciling their accounts. Claims filed beyond this timeframe will not be accepted, a measure intended to give companies greater certainty and prevent the accumulation of outdated or unverifiable refund requests.
To enhance tax integrity, the Federal Tax Authority will also gain broader powers to deny input-tax deductions on transactions connected to evasion schemes. Businesses will be required to verify the authenticity of supplies before claiming VAT credits, reinforcing shared responsibility and tightening oversight to protect public revenues.
According to the Ministry, these reforms are part of a wider national effort to modernize tax administration, promote transparency, and sustain the UAE’s attractiveness as a regional business hub. The revised rules are expected to deliver a more efficient, fair, and future-ready VAT framework for companies operating in the country.
