UAE Tax Procedures Update: Key Changes from April 1

The UAE laws and regulations are always evolving to enhance transparency and compliance. Additionally, the regular updates align the UAE legislation with that of developed economies. However, it requires expert-level knowledge and analysis to identify the relevant changes applicable to a given business accurately. Therefore, it is ideal to consult or keep on board a UAE-based tax expert, such as the CZTA. In this regulatory update, we provide the UAE tax procedures update and applicable changes from April 1^st, 2026. Let’s highlight the key changes applicable to businesses operating in the UAE.

What Changes were Introduced in the UAE Tax Procedures Update, Effective April 1?

The Ministry of Finance (MoF) recently announced amendments to Cabinet Decision No. (74) of 2023 on the Executive regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures. The amendment is applicable through Cabinet Decision No. 17 of 2026. Some of the key changes are applicable as follows:

Submission of Voluntary Disclosure

The new changes clarify the procedures for the submission of voluntary disclosures. For instance, if the entity becomes aware of any errors in the submitted tax return that resulted in a lower tax payable, then the AED 10,000 threshold shall apply. If the amount is more than AED 10,000, the taxable person must submit the voluntary disclosure within 20 business days from the date of error awareness. Errors of AED 10,000 or less may be rectified in the next eligible return or through a voluntary disclosure where no return is available. For further details, contact our tax experts.

Increase in Record Retention Period – Refund Claims

The new update extends the record retention period by a further 2 years. This is in the case where the taxable person has a pending refund application submitted within the five years from the end of the relevant tax period. Furthermore, there is no decision yet by the tax authority. In this scenario, the taxable entity must retain the documents for a further 2 years (a total of 7 years).

Expanded Authority of FTA

The amendments also indicate the possibility of extending the retention period of seizure of documents or assets for tax audit. However, the authority must notify the taxable entity.

Credit Balance Refund Procedures

A taxpayer who has a credit balance refund under the tax laws may apply for the refund in the approved form and manner by the FTA.

How do the New Tax Rules Impact Business Compliance Requirements?

The new update brings about several changes; however, the real case is how it impacts businesses in terms of compliance. Let’s highlight some of the key areas where entities will need attention.

Robust Error Discovery

If there is any underpayment in filed VAT or corporate tax return, entities must have robust systems in place to identify errors. This is because the voluntary disclosure deadline may already be running, and therefore, quick action is necessary.

Update Record Retention

If a business has a pending VAT refund request with the FTA and the five-year record retention period is approaching. The entity might need to update the record retention for a further 2 years to comply with the new updates.

Digital Records Backup

The FTA now has more power to seize and retain documents for a longer period. Therefore, entities must maintain digital records of financial records for the smooth running of the business. Thus, in case of an audit, they can now seize the documents beyond the previously stipulated deadlines.

Provide Staff Training

Entities must ensure training of the relevant tax and accounting employees on the relevant changes in the tax laws. This is necessary to maintain a smooth, compliant environment within the organization and adapt to changes quickly.

Seek Professional Advice

Ideally, seeking expert consultation can be the first step to remaining compliant with the UAE laws and relevant changes. It saves time and money in the long run. One of the prime tax consultants in the UAE is Creative Zone Tax & Accounting (CZTA).

What Penalties or Enforcement Changes Should Businesses Be Aware of?

The Cabinet Decision No. 17 of 2026 does not specifically alter any penalties. However, there is a direct and indirect increase in compliance responsibilities. Therefore, failure to comply will definitely result in penalties. If an entity is not aware of the relevant changes in the tax laws, it will be more prone to fines. Firms must adhere to all the relevant changes and apply and amend their internal procedures to align with these changes. Finally, there is no harm in seeking expert advice.

Summary

There is a UAE tax procedures update that is applicable from April 1, 2026. Mainly, there are 4 key updates through Cabinet Decision No. 17 of 2026. Firstly, there is an increase in the records’ retention period by an additional 2 years if there is any pending refund application. Secondly, there are changes to the rules and the threshold for submission of voluntary disclosure in case of errors. Thirdly, the tax authority can now extend the seizure period of documents or assets beyond the stipulated period. Lastly, there are now credit balance refund procedures applicable to claim the credit balance under the tax laws. The UAE entities must now strive to amend and adapt their procedures and documents in a way that aligns with the new regulations.

Creative Zone Tax & Accounting (CZTA)

Our team is continuously in a process to update them with the regulatory changes in the UAE. Therefore, as a credible tax firm, we transfer and apply our knowledge to our clients’ books and compliance journey. Thus, dealing with us, you do not have to worry about any regulatory changes and compliance issues. Contact us today.

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