Reminder: UAE VAT Updates Effective January 1, 2026

The FTA has released amendments and guidelines for the VAT Law, including a new Administrative Exceptions Guide. Big changes effective January 1, 2026, include removal of self-invoicing for imports and a five-year limit on excess recoverable input tax claims.

The Ministry of Finance and Federal Tax Authority (FTA) have issued amendments and new guidelines to the Value Added Tax Law.

Updated VAT Administrative Exceptions Guide

On December 5, 2025, the FTA published a new version of the VAT Administrative Exceptions Guide.

The guide outlines procedures for taxpayers to request exceptions from document issuance requirements under Federal Decree-Law No. 8 of 2017 on Value Added Tax, specifically for:

• Issuance and details on Tax Invoices
• Issuance and details on Tax Credit Notes
• Alternative evidence to prove Export of Goods
• Extension of the period to export Goods

Conditions vary by document type but generally require maintaining sufficient alternative records and providing reasonable justification or proof of inability to meet standard requirements.

Applications must follow the procedure in the EmaraTax portal (detailed in the guide). Requests outside this scope will be rejected.

Big Changes to VAT Obligations and Rights

Amendments via Federal Decree-Laws No. 16 and 17 of 2025, effective January 1, 2026:

• Reverse Charge: Taxpayers are no longer required to self-invoice for cross-border imports of goods and services made for business purposes. Self-invoicing may still be needed to support VAT recovery where supplier documentation is unavailable.
• Excess Recoverable Input Tax: A five-year time limit is introduced for carrying forward and claiming excess recoverable input tax. After five years from the end of the relevant tax period, the credit can no longer be offset or claimed. Taxpayers with existing refunds that have expired or will expire within one year from January 1, 2026, must request a refund before January 1, 2027.

These updates also remind taxpayers of conditions for applying exceptions to tax invoice/credit note issuance and export documentation.

Administrative Exceptions VAT Guide: https://tax.gov.ae/Datafolder/Files/Pdf/2025/VAT%20Administrative%20Exceptions%20Guide%20-%20EN%20-%2005%2012%202025.pdf