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UAE Introduces E-Invoicing Penalties and Tightens VAT Refund Rules Effective January 2026

  • New e-invoicing penalties under Cabinet Decision No. 106 of 2025 include monthly fines for delayed implementation, late invoice transmission, and failure to report system malfunctions.
  • VAT Law amendments effective 1 January 2026 introduce a five-year limit on input tax refunds and clarify reverse charge/self-invoicing requirements.
  • Transitional relief allows certain businesses to submit outstanding refund claims by 31 December 2026.
  • The FTA can deny input tax recovery if linked to tax evasion or insufficient due diligence.
  • Overall, UAE businesses face stricter, time-sensitive compliance and increased financial penalties for non-compliance.

Source: rtcsuite.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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