The UAE introduced amendments to the VAT law under Federal Decree-Law No.16 of 2025, effective 1 January 2026, announced by the Ministry of Finance (UAE).
One important update relates to the time limit for claiming input VAT refunds.
Businesses must ensure that excess input VAT is claimed within five years from the end of the relevant tax period.
If the claim is not made within this period, the VAT refund may no longer be recoverable.
Why This Matters for Businesses
Many companies accumulate VAT credits over time due to:
- Capital expenditures
- Incorrect VAT treatment
- Missed input VAT claims
- Changes in business operations
Without reviewing historical VAT returns, businesses may risk losing recoverable VAT permanently once the five-year period expires.
Who Should Review Their VAT Position?
Businesses that should consider reviewing their VAT returns include:
- Companies with large capital expenses
- Businesses carrying VAT credit balances
- Companies that changed accountants
- Businesses that recently registered for VAT
A simple VAT review can help identify unclaimed input VAT and compliance gaps.
How StratEdge Can Help
At StratEdge Business Advisory, we assist businesses with:
- VAT return reviews
- Identifying unclaimed input VAT
- VAT compliance checks
- Ongoing accounting and finance support
Reviewing historical VAT returns can help ensure that no recoverable VAT is left unclaimed.
If you would like assistance reviewing your VAT position, feel free to contact us.
👉 www.stratedgeadvisor.com
FTA Notification:
FTA Notification Document