Federal Decree Law No. 17 of 2025 introduces important amendments to the UAE Tax Procedures Law, enhancing clarity, improving administrative efficiency, and strengthening compliance predictability.
The updates create more structured timelines and provide businesses with clearer guidance on tax assessments, refunds, and audit processes.
Unified Limitation Period
A unified five year limitation period now applies to tax assessments, audits, refund claims, and the use of credit balances. This creates consistency across tax procedures and improves predictability for taxpayers.
Time Limit for Credit Balances and Refunds
Credit balances or overpaid tax must be refunded or used within five years from the end of the relevant tax period. Amounts not claimed within this timeframe may be forfeited.
This change makes regular monitoring of balances essential.
Nil Impact Errors No Longer Require Disclosure
If an error does not affect the payable tax amount, a voluntary disclosure is no longer required. Examples include incorrect TRN details, address errors, or classification issues that do not impact tax liability.
This reduces administrative burden and simplifies compliance.
Extended Audit Window in Cases of Tax Evasion
While the standard audit period remains five years, the limitation period may extend up to fifteen years in cases involving intent to evade taxes or fraudulent activity.
This reinforces the importance of strong documentation and internal controls.
FTA Authority to Issue Binding Guidance
The Federal Tax Authority is now authorized to issue binding guidance to clarify procedures and tax treatment. This promotes consistency and provides clearer direction for taxpayers.
Transitional Relief for Existing Credit Balances
Where the five year limitation period falls on or before 1 January 2026, taxpayers are granted an additional year to file refund requests or use credit balances. The extended deadline runs through 31 December 2026.
MCA Gulf Perspective
MCA Gulf supports organizations in evaluating tax exposure, strengthening compliance procedures, and ensuring timely action under the revised limitation rules.
For further technical insight, download the Tax Procedures Law amendments carousel below.
For clarification or review support, reach out to mcatax@mcagulf.com.
