- UAE introduced a strict five-year deadline (effective January 1, 2026) for claiming excess VAT credits or refunds; unclaimed amounts after this period are lost permanently.
- Previously, businesses could carry forward VAT credits indefinitely, but now these credits are time-bound and must be actively managed.
- Transitional relief allows recovery of credits from 2018-2020 until December 31, 2026; credits from 2021 are already expiring in phases.
- Delayed claims risk increased scrutiny and stricter documentation requirements.
- Managing VAT credits is now a critical cash flow and liquidity issue, not just a compliance matter; businesses must act proactively to avoid financial loss.
Source: khaleejtimes.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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