Federal Decree-Law No. 17 of 2025 (FDL17) has recently been published and amends certain provisions of Federal Decree-Law No. 28 of 2022 Concerning Tax Procedures (the TPL). FDL17 comes into force on January 1, 2026.
In this newsflash we briefly consider some of the main amendments introduced by FDL17, including:
- the correction of errors that have no tax impact;
- limitations on the period in which to claim a tax refund;
- changes to the Statute of Limitation Rules; and
- new powers afforded to the FTA in relation to the issue of Binding Directives.
Correction of errors (Article 10)
Previously Article 10(5) of the TPL provided that where a taxpayer discovers an error or omission in a tax return, which does not result in any difference in the amount of tax due, the taxpayer must correct such return by submitting a Voluntary Disclosure (VD). FDL17 amends this by providing that a taxpayer must correct the error either by submitting a VD (where required by the FTA), or otherwise directly through a tax return in any other case. This change is welcomed as it aligns the TPL with Article of 10(3) of the Executive Regulations to the TPL which already provides for both options where the error does not result in a tax difference.
Tax Refunds (Article 38)
Article 38 previously provided that a taxpayer may apply for a tax refund where he is entitled thereto under the applicable Tax Law and the amount paid is in excess of the Payable Tax and Administrative Penalties. FDL17 now amends Article 38 by introducing a period in which the tax refund must be claimed.
Article 38(2) provides that a tax refund request must now be submitted within a period not exceeding 5 years from the end of the relevant tax period in which:
- The excess payment was made, if the credit balance resulted from an overpayment of tax.
- The tax return or VD was submitted or the tax assessment in respect thereof was issued, if the credit balance resulted from the submission of such tax return, VD or a decision issued by the FTA (as applicable).
- The credit balance arose, in relation to any other case.
Where a credit balance arises from a decision issued by the FTA after the expiry of the 5-year period contemplated above or within the last 90 days thereof, the taxpayer may submit a refund request within one year from the date of the credit balance arising (Article 38(3)). Where the credit balance arises in any other case after the expiry of the 5 five-year period or within the last 90 days thereof, the taxpayer may submit a refund request within 90 days from the date of credit balance arising (Article 38(4)).
If a refund request is not submitted in accordance with the deadlines stipulated above, the right to claim the tax refund shall expire.
Statute of Limitation (Article 46)
In general, the FTA may not conduct a tax audit or issue a tax assessment after the expiration of 5 years from the end of a relevant tax period, provided that this is subject to a number of exceptions.
Given the amendments to Article 38, Article 46 has also been amended by allowing the FTA to conduct a tax audit or issue a tax assessment after 5 years from the end of the relevant tax period, where such tax audit or tax assessment relates to a tax refund request submitted in the fifth year from the end of the tax period referred to in Article 38(2), or within the period referred to in Article 38(3) or 38(4) (see earlier discussion above). Provided such tax audit must be completed or the tax assessment must be issued within 2 years from the date of submitting the refund request.
FTA Directives (Article 54 (bis))
FDL17 introduces a new Article 54(bis) to the TPL. This empowers the FTA to issue binding decisions and directives regarding the application of the TPL and the Tax Laws to transactions.
Our Tax Services
Our Tax Team can assist you in better understanding the tax considerations arising from these amendments and provide you with tailored support.
Hadef & Partners provide clients with specialist tax advice, planning and implementation support to achieve optimal tax outcomes for their business and personal interests in the UAE. Should you require support, please contact Theunis Claassen, our Head of Tax, to arrange an initial discussion.