UAE Amends VAT Law: Reverse Charge, Input Tax Denial, Five-Year Cap, and Limitation Changes

• The UAE amended its VAT law (Federal Decree-Law No. 16 of 2025), focusing on four main areas.
• The reverse charge mechanism was clarified: self-issued tax invoices are no longer required for imported goods/services, reducing administrative burden.
• VAT recovery is denied for transactions linked to tax evasion if the taxpayer knew or should have known, increasing due diligence and supply chain risk assessment.
• Excess input VAT must be used or refunded within five years, or it will be forfeited, enforcing stricter time limits.
• The VAT-specific statute of limitation is removed; VAT audits and assessments will follow the general Tax Procedures Law from January 1, 2026.

Source: mailchi.mp

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.

---

---