The United Arab Emirates has already declared significant changes in its tax legislation. These reforms will influence how companies handle refunds, come under audits and be knowledgeable about their rights. The new regulations become valid since January 1, 2026. They seek to bring the tax system into the light.

Hopefully, the updates will enhance trust and get solutions to tax problems faster.

Streamlined Tax Refunds

Refund of money at the Federal Tax Authority (FTA) would become easier. The government has provided a strict five-year limit on the time taken by taxpayers to get refunds. This provides businesses with a certain time in which to rectify. It eliminates confusion about the past regarding deadlines.

Five-Year Window: The businesses now have a definite 5-year window period in which a refund claim can be made.
Fast Processing: The modifications are expected to make the FTA process the refund requests faster.

This is beneficial in terms of cash flow management by businesses. With this, they are able to budget their finances knowing that they have a clear procedure for reclaiming overpaid tax.

Stronger Audit Powers for the FTA

The FTA will be empowered when it comes to tax audits and investigations. The revised rules enhance the power of the authority to ensure that business records are checked properly.

Increased Jurisdiction: The FTA is now empowered to exercise wider jurisdiction to make everybody abide by the rules.
Pay attention to Accuracy: It implies that businesses should maintain outstanding financial documentation. Compliance with the international accounting standards has become significantly more important than ever.
Sanctions: New and heavier sanctions are imposed on the offenders. The government aims to ensure that all businesses declare earnings and pay taxes in due time.

As an example, a late tax registration is now subject to a fine of AED 10,000. There are also huge fines for unpaid amounts.

Clearer Taxpayer Rights

Taxpayer rights are also made more specific through the new laws. This will assist in counterbalancing the increment in audit authority of the FTA. The updates give a superior basis for solving disputes between the taxpayers and the authorities.

Improved Dispute Resolution: The new rules will accelerate resolutions in the event that a business has a dispute with a tax decision.
Fairer Process: The government desires to have a clear system in which businesses know their rights and obligations.

This emphasis on simplicity contributes to the development of a better relationship between the business and the taxation agency.