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UAE VAT Credits: Old Refunds Must Be Claimed by 31 December 2026 or Lost
The 2026 VAT amendments put a five-year limit on excess input VAT. A one-time transitional window to claim older balances closes on 31 December 2026.
Federal Decree-Law No. 16 of 2025 amended the UAE VAT Law from 1 January 2026, alongside Federal Decree-Law No. 17 of 2025, which amended the Tax Procedures Law. One change matters to any business carrying a VAT credit balance: excess input VAT can no longer be carried forward forever.
Businesses with older balances have a one-time window to recover them. That window closes on 31 December 2026.
The New Five-Year Limit
Excess recoverable input tax can now only be carried forward or refunded within five years from the end of the tax period in which it arose. Once that period has passed, the balance can no longer be offset or refunded.
The Transitional Window
Credits whose five-year period had already expired, or would expire within a year of 1 January 2026, can still be claimed until 31 December 2026. Commentators read the scope of this relief slightly differently, so check how it applies to your own balances before relying on it.
Other VAT Changes in Force Since January
The same amendments made several other changes that finance teams should already have built in:
- No self-invoice is needed for supplies under the reverse charge mechanism
- The FTA can deny input VAT where a transaction is linked to tax evasion and the business knew or should have known
- The VAT-specific limitation rule was repealed, and the revised Tax Procedures Law now governs time limits
- The standard VAT rate remains 5 per cent
What to Do Before Year-End
Review the VAT credit balance on your account by tax period, work out which amounts fall inside the transitional window, and file refund claims well before 31 December 2026 so there is time to answer any FTA questions.
Frequently Asked Questions
How long can I carry forward excess input VAT in the UAE?
Since 1 January 2026, excess input tax can only be carried forward or refunded within five years from the end of the tax period in which it arose.
What happens to VAT credits older than five years?
Balances that had already expired, or would expire within a year of 1 January 2026, can be claimed under a transitional rule until 31 December 2026. After that, they are lost.
Sources
- Ministry of Finance: VAT law amendments starting January 2026
- Baker McKenzie: New Federal Decree-Laws amending the VAT Law and Tax Procedures Law
- Middle East Briefing: UAE VAT credits expiring in 2026
This article is general information, not advice for your situation. Rules change; check the current position or speak to an advisor before acting.
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