UAE to Enforce New VAT Amendments from January 2026

UAE, 04 December, 2025: The Ministry of Finance has issued Federal Decree-Law No. (16) of 2025, introducing key amendments to the UAE VAT Law, effective 1 January 2026. The changes aim to streamline compliance, improve transparency, and strengthen tax governance.

Under the amendments, taxable persons will no longer be required to issue self-invoices under the reverse charge mechanism but must retain all supporting documents as outlined in the Executive Regulation. A new five-year limit has also been introduced for reclaiming excess refundable tax, ensuring timely reconciliations and preventing long-outstanding balances.

To combat tax evasion, the Federal Tax Authority is now empowered to deny input tax deductions if a supply is linked to an evasion arrangement. Businesses must verify the authenticity of supplies before claiming input tax, reinforcing accountability across the supply chain.

The Ministry stated that the changes align with global best practices and support a more efficient, fair, and transparent tax environment while enhancing the UAE’s economic competitiveness.