- Amendments Overview: The UAE will implement changes to its VAT legislation starting January 1, 2026, aimed at simplifying VAT procedures, enhancing transparency, and improving administrative efficiency, as outlined in Federal Decree-Law No. (16) of 2025.
- Key Changes: Notable updates include the removal of the self-invoicing requirement under the reverse charge mechanism, allowing businesses to retain supporting documents instead, and the introduction of a five-year deadline for reclaiming excess refundable VAT, enhancing audit clarity and financial certainty.
- Compliance and Governance: The Federal Tax Authority will deny input-tax deductions linked to tax evasion, requiring taxable persons to verify the legitimacy of supplies, thereby reinforcing fair treatment among taxpayers and strengthening governance within the supply chain.
Source: globalvatcompliance.com
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