UAE Tax Procedures Executive Regulations – 2026 Amendments

Key Updates under Cabinet Decision No. 17 of 2026 vs Cabinet Decision No. 74 of 2023

The UAE Ministry of Finance has issued Cabinet Decision No. 17 of 2026, effective from 1 April 2026, introducing targeted amendments to the Executive Regulations of Federal Decree-Law No. 28 of 2022 on Tax Procedures, which were originally implemented through Cabinet Decision No. 74 of 2023.

The 2026 amendments do not constitute a full replacement of the 2023 framework. Rather, they represent focused refinements aimed at improving clarity, strengthening governance, and enhancing operational efficiency based on practical implementation experience under the Federal Tax Authority (FTA).

Summary of Key Changes

1. Detailed Overview of Amendments

A. Record Retention – Link to Open Positions and Refunds

2023 Position:

Taxpayers were required to retain accounting records generally for 5 to 7 years, depending on the nature of documents and specific triggering events (such as audits, disputes, or voluntary disclosures).

2026 Amendment:

The retention obligation is now explicitly extended where a refund claim or unresolved tax position exists.

• Records must be retained for an additional period (generally two years) where a refund application remains under review or is not yet finalized
• This applies even where the standard retention period has otherwise expired

Impact:
Tax record retention is now linked to tax exposure rather than solely to time-based rules, requiring taxpayers to retain documentation until all related claims are fully resolved.

B. Voluntary Disclosure – Improved Procedural Clarity

2023 Position:

Voluntary disclosure was required within 20 business days upon identifying an error, with a materiality threshold of AED 10,000 distinguishing treatment.

2026 Amendment:

The rules are clarified rather than fundamentally changed, with emphasis on:

• Clearer alignment between:
  • error detection
  • correction through tax return amendments
  • submission of voluntary disclosure where no return correction is available
• More structured interpretation of when a disclosure is mandatory versus when administrative correction is sufficient

Impact:
Reduces ambiguity and ensures more consistent application of correction procedures.

C. Tax Refunds – Reframed as Credit Balance Refund Mechanism

2023 Position:

Article 26 governed general tax refund procedures, with timelines for review and payment by the FTA.

2026 Amendment (Reframed Provision):

The provision is now renamed and repositioned as “Credit Balance Refund Procedures”, reflecting a broader and more accurate conceptual approach.

• Refunds are explicitly linked to credit balances rather than standalone refund claims
• The FTA may defer refund processing until all required tax returns have been submitted
• The framework ensures that taxpayer compliance is fully up to date before any credit is released

Impact:
This is a substantive clarification aligning terminology with VAT practice and reinforcing the principle that refunds are conditional upon full compliance status.

D. Tax Audit and Enforcement – Strengthened Operational Flexibility

2023 Position:

The FTA had established powers to conduct audits, seize documents, and extend retention periods in defined circumstances.

2026 Amendment:

The updated framework enhances flexibility by:

• Allowing extended retention or seizure where refund claims or investigations remain open
• Improving alignment between audit timelines and unresolved tax positions
• Reinforcing the use of structured data in audit procedures

Impact:
Strengthens the FTA’s ability to manage audits involving complex or ongoing tax matters.

E. Confidentiality and Disclosure – Strengthened Governance Framework

2023 Position:

Disclosure of taxpayer information to government entities was permitted under controlled arrangements based on memoranda of understanding, subject to certain safeguards.

2026 Amendment (Revised Provision):

The updated framework significantly strengthens this provision by:

• Requiring formalized agreements governing inter-agency data sharing
• Mandating explicit controls over:
  • confidentiality
  • data protection
  • permitted use of shared information
• Establishing stricter governance standards for information exchange between authorities

Impact:
This results in a more robust and formalized data governance regime, enhancing taxpayer protection while maintaining inter-agency cooperation.

2. Conclusion

Cabinet Decision No. 17 of 2026 refines rather than replaces the 2023 Executive Regulations. The amendments are primarily aimed at improving clarity, governance, and operational consistency within the UAE tax administration framework.

Businesses should particularly review their processes relating to tax refunds, record retention, and inter-company or inter-government data handling to ensure alignment with the updated requirements effective from 1 April 2026.