The UAE Ministry of Finance has published Cabinet Decision 17 of 2026 (“Decision”), outlining significant updates to the Executive Regulations on Tax Procedure Law, effective from 1 April 2026.
The revised provisions aim to enhance tax governance, promote transparency, and reinforce compliance obligations across businesses and taxpayers.
One of the key amendments extends the record-retention period when refund claims are submitted within the statutory deadline but are still under review by the Federal Tax Authority (“FTA”), ensuring records remain available for thorough assessment.
What’s Clarified?
The Decision provides clarification on the following matters:
- Longer record retention for refund cases.
- Voluntary disclosure procedures.
- Enhanced framework for data disclosure.
- Formalisation of extended audit procedures.
Important Update
Per the Statue of Limitations under the Tax Procedures Law, the FTA may conduct a tax audit or issue a tax assessment within 5 years from the end of the relevant tax period. It means, the standard audit window applicable to all VAT-registered businesses in the UAE.
It now clarifies that, in case of refund claims that are submitted within the statutory deadline (within 5 years from the end of tax period) but are still under review by FTA, the records must be retained for an additional two (2) years.
Example
- Tax period ending: 31 January 2021
- Normal audit limit: Up to 31 January 2026 (5 years)
- VAT refund submitted: 15 January 2026
- Extended audit limit: Up to 15 January 2028 (an extra 2 years beyond the submission date for refund)
This means the audit exposure can stretch to almost 7 years from the original tax period.
Key Takeaway
The FTA’s standard audit period is five years from the end of the tax period, but submitting a refund application in the fifth year can extend the audit window by an additional two years. This results in greater scrutiny of older transactions connected to the refund claim, so businesses should keep all supporting documents organised and available for the longer time.
Next Steps – What Businesses Should Do Now
- Avoid last-minute VAT refunds – track timelines and submit early.
- Documentation– retain records for up to 7 years if refunds claims are submitted late.
- Pre-refund review – verify VAT calculations and positions before filing the refund request.
- Assess audit readiness – ensure historical transactions are well-supported for FTA scrutiny.
- Update internal policies – align record-keeping and audit procedures with extended timelines.
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