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On 25 November 2025, the UAE Ministry of Finance (MoF) issued Federal Decree-Law No. 16 of 2025, introducing amendments to select provisions of Federal Decree-Law No. 8 of 2017 (The ‘UAE VAT Law’). In parallel, the MoF also issued Federal Decree-Law No. 17 of 2025, amending specific provisions of Federal Decree-Law No. 28 of 2022 (The ‘Tax Procedures Law’). Both the updated UAE VAT Law and the amended Tax Procedures Law will take effect from 1 January 2026.

Key aspects of the Decision and applicable conditions:

1. Article 48, Clause 1 (Reverse Charge) : If the Taxable Person imports Concerned Goods or Concerned Services for the purposes of his Business, then he shall be treated as making a Taxable Supply to himself, and shall be responsible for accounting for the Due Tax on that Supply and complying with all other Tax obligations arising, with the exception of issuing a Tax Invoice to himself

FCC View: Taxpayers are no longer required to issue self-invoices when importing certain goods or services for business use. This change is intended to simplify compliance and reduce administrative burdens.

2. Article 54 (bis) added:
   1. The Authority shall reject the deduction of the Recoverable Input Tax if it is established to the Authority that the supply subject to the deduction was part of a supply or a chain of supplies related to Tax Evasion, and the Taxable Person was aware of this relation upon deducting the Recoverable Input Tax
   2. The Authority may reject the deduction of the Recoverable Input Tax if it is established to the Authority that the supply subject to the deduction was part of a supply or a chain of supplies related to Tax Evasion, and the Taxable Person should, based on circumstances of the supply, have been aware of this relation.
   3. For the purposes of applying the provisions of Clause b, the Taxable Person shall be considered to have been required to be aware that the supply was part of a supply or a chain of supplies related to Tax Evasion, if he did not verify the validity and integrity of the supplies he receives before deduction of Input Tax, in accordance with the measures, procedures and conditions determined by the Authority in this regard.

FCC View: FTA have put more responsibilities on the receipt of goods or services to do more due diligence of their suppliers and make sure all the suppliers in the supply chain pays the VAT to authority on time. 

3. Article 74, Clause 3 (Excess Recoverable Tax): If no request is submitted to recover the excess after offsetting, the excess shall be carried forward to subsequent Tax Periods for a period not exceeding (5) five years from the end of the Tax Period in which the excess arose. In the event that no request to recover the excess has been submitted or it was not used to settle any Tax liabilities before the expiry of this period, the right to claim such excess shall lapse and may not be used to settle any Tax liabilities 

FCC View: Businesses are advised to review and ensure that all excess recoverable input tax is claimed or applied against VAT liabilities within the five-year period to prevent the expiration of the right to claim and the potential loss of recoverable VAT. Also, for all the existing cases extension till 31.12.2026 is provided by the authority. 

4. Article 79 (bis) – Statute of Limitation: It should be noted that this Article has been repealed, and any provisions that conflict with the UAE VAT Law are no longer applicable/valid. 

Key take aways: 

1. No need of self invoicing for the import of goods/services imported for business use
2. Refund application should be filed within 5 years from the end of tax period
3. Recipient of goods/services need to do more due diligence of their suppliers, as authority reserves the right reject the VAT input in case part of a chain linked to tax evasion and the taxpayer was aware of this connection when claiming the deduction.

Click here to read the official announcement