UAE Tax Alert

Procedural and Compliance Updates Under Cabinet Decision No. 17 of 2026

Background

Effective 1 April 2026, the UAE has implemented key updates to its tax procedural framework. These changes were introduced via Cabinet Decision No. 17 of 2026, which was issued on 23 March 2026 to amend the existing Executive Regulations (Cabinet Decision No. 74 of 2023) of the Federal Decree-Law No. 28 of 2022 on Tax Procedures.

These changes follow the amendments to the Tax Procedures Law, which came into effect on 1 January 2026. Cabinet Decision No. 17 of 2026 introduces the necessary provisions to implement those legislative changes.

The Decision introduces targeted amendments to five provisions of the Executive Regulation, covering refund procedures, voluntary disclosures (VD), record retention, audit powers, and the framework for sharing taxpayer information with government entities. These amendments apply to all taxes administered under the Tax Procedures Law, including VAT, Excise Tax, and Corporate Tax.

Key Updates

1 – Extended Record Retention for Pending Refund Applications (Art. 3(2)(e))

A new paragraph has been added to Article 3, introducing an additional two-year record retention period in cases where a refund application has been submitted but the Federal Tax Authority (“FTA”) has not yet issued a decision, provided the application was submitted within the statutory limitation period under Article 38 of the Tax Procedures Law.

Under the existing framework, the standard retention period is five years from the end of the relevant Tax Period for Taxable Persons. The new provision extends this on a case-by-case basis where a refund remains unresolved, ensuring that documentation in support of the claim remains available throughout the FTA’s review and decision-making process.

In practice, this means that the effective retention period for a Taxable Person with an open refund claim may extend beyond the standard five-year period, depending on when the refund is finalized. Businesses that follow standard five-year document archiving or automated deletion processes without considering open refund positions may face compliance gaps.

2 – Voluntary Disclosure: Refund-Related Errors and No-Tax-Impact Corrections (Art. 10)

Article 10 has been amended in two respects, and the distinction between them matters significantly.

Refund error correction framework. Where a taxpayer identifies that a refund claim submitted to the FTA is incorrect and results in an over-claimed refund due to an error in a Tax Return or Tax Assessment, the following applies:

Errors above AED 10,000: a Voluntary Disclosure must be submitted within 20 business days of the taxpayer becoming aware of the error.
Errors of AED 10,000 or below: the taxpayer must correct the error in the next eligible Tax Return, or submit a Voluntary Disclosure within 20 business days if no return is available through which the correction can be made.

This approach was previously set out in FTA guidance but is now expressly embedded in the Executive Regulation, giving it clearer legal enforceability.

Removal of the explicit ‘no tax impact’ provision. The previous requirement to submit a Voluntary Disclosure for errors with no tax impact has been removed from the Executive Regulation.

This does not change the underlying obligation. The requirement remains under the Tax Procedures Law and is supported by FTA Decision No. 8 of 2024. The change is a drafting simplification, not a relaxation of compliance requirements. Errors with no tax impact still require disclosure where applicable.

3 – Credit Balance Refund Procedures (Art. 26)

Article 26 has been updated to align with the Tax Procedures Law. The title has changed from “Tax Refund Procedures” to “Credit Balance Refund Procedures”, with terminology updated throughout to “refund of credit balance”.

The statutory timelines remain unchanged: the FTA has 20 business days from submission to issue a decision on a refund application, and 5 business days from that decision to process repayment.

The key clarification is that the refund mechanism now explicitly covers any credit balance held with the FTA, including Corporate Tax overpayments and excess instalment payments, not only refund claims linked to specific Tax Returns.

In addition, the FTA may defer a credit balance refund until all outstanding Tax Returns are filed. This makes filing compliance a condition for receiving refunds. Businesses should therefore monitor credit balances together with return filing status, as any outstanding VAT, Excise, or Corporate Tax return may delay repayment.

4 – Extension of Seizure and Retention Period (Art. 18(10))

A new clause allows the FTA to extend the period for seizing and retaining documents or assets beyond the original timeframe stated in the seizure notice, with notification provided where possible.

This expands the FTA’s enforcement powers by removing the fixed nature of the initial seizure period, allowing extensions where needed to complete audits or examinations.

The FTA is only required to notify taxpayers where practicable, and no maximum extension period is specified. This may result in longer retention of records during audits.

5 – Confidentiality and Disclosure of Information to Government Entities (Art. 28(1)(b))

Article 28(1)(b) has been amended to strengthen the conditions for disclosure of taxpayer information to government entities. Disclosure is now only permitted under a formal agreement, replacing the previous reference to memoranda of understanding.

The agreement must set out confidentiality and data protection requirements, permitted use of information, and procedures for security, control, further disclosure, accuracy, and access.

This change strengthens governance over taxpayer data sharing between UAE authorities and aligns with broader data protection and digital policy developments. It reinforces that taxpayer information shared with the FTA is subject to defined controls when exchanged with other government bodies.

Takeaways

Cabinet Decision No. 17 of 2026 is largely procedural in character but carries meaningful compliance consequences, particularly in the areas of refund governance, voluntary disclosure, and audit preparedness. Taxpayers should consider the following:

Review Open Refund Claims: Any refund applications pending as of 1 April 2026 are now subject to an extended two-year document retention period. Ensure all supporting records are secured and auto-deletion policies are updated.
Clarify Voluntary Disclosure Rules: The obligation to file a VD for errors with zero tax impact remains. Ensure finance and tax teams do not misinterpret recent text removals as an exemption from this requirement.
Monitor the 20-Day VD Window: Refund errors exceeding AED 10,000 must be reported within 20 business days. Establish rapid internal escalation processes to meet this tight deadline across all tax registrations.
Manage Credit Balances Proactively: Treat FTA credits as active receivables rather than passive carry-forwards. The FTA may defer refunds if any tax returns remain outstanding.
Update audit readiness protocols: The FTA’s ability to extend document and asset seizure periods without a fixed cap, requires businesses to revisit their audit contingency plans.
Review data-sharing arrangements. The FTA must now have a formal agreement in place before sharing your tax information with other government bodies. If you operate in a regulated sector, confirm that existing arrangements meet this standard.