How Did UAE Tax Procedures Change on 1 April 2026? (4 Critical Updates)
Cabinet Decision No. 17 of 2026, issued on 23 March 2026 and effective from 1 April 2026, amended four articles of the UAE tax procedures executive regulation. The amended regulation is the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures, originally enacted as Cabinet Decision No. 74 of 2023. The changes affect voluntary disclosure rules, record retention obligations when refunds are pending, FTA powers to extend document seizures, the 20-business-day refund decision timeline, and information disclosure to government entities.
In this guide, Qaspro Global breaks down every change, who it affects, and what businesses must do to stay compliant as of April 2026.
Which UAE Law Governs Tax Procedures for VAT and Corporate Tax?
Cabinet Decision No. 17 of 2026 is an amending decision issued by the UAE Cabinet on 23 March 2026. It amends specific articles of Cabinet Decision No. 74 of 2023, which is the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures. The base law, Federal Decree-Law No. 28 of 2022, governs how all UAE taxes are administered, including registration, record keeping, audits, voluntary disclosures, refunds, penalties, and tax agent regulation. Cabinet Decision No. 74 of 2023 sets out the detailed procedural rules for implementing that law. Cabinet Decision No. 17 of 2026 updates four of those procedural rules to reflect FTA operational experience and close gaps in the existing regulation.
Change 1: New AED 10,000 Threshold That Determines Whether You Must File a Voluntary Disclosure
The most significant change in Cabinet Decision No. 17 of 2026 is the amendment to Article 10 on voluntary disclosures. The new rule introduces a two-track system based on whether the underpayment or overstated refund exceeds AED 10,000.
Track 1: Errors Over AED 10,000
If a UAE business discovers that a tax return or tax assessment resulted in an underpayment of tax exceeding AED 10,000, the business must submit a Voluntary Disclosure to the FTA within 20 business days from the date the error was discovered. There is no alternative option. The 20-business-day clock starts from the moment the business becomes aware of the error, not from any audit notification or FTA inquiry.
Track 2: Errors of AED 10,000 or Less
If the underpayment is AED 10,000 or less, the business has two options:
- Option A: Correct the error directly in the next tax return that has not yet become due, or in the tax return for the period in which the error was discovered, whichever is earlier. No separate Voluntary Disclosure filing is needed.
- Option B: If there is no upcoming tax return through which the correction can be made, submit a Voluntary Disclosure within 20 business days of discovering the error.
The same two-track logic applies to overstated refund applications. If a business discovers it claimed a refund larger than it was entitled to, and the overstatement exceeds AED 10,000, a Voluntary Disclosure must be filed within 20 business days. For AED 10,000 or less, the correction can be made through the next tax return if one is available.
Why This Matters for UAE Businesses
Before this amendment, the voluntary disclosure rules under Cabinet Decision No. 74 of 2023 did not specify a clear monetary threshold distinguishing when a VD was mandatory versus when a return correction was sufficient. The new AED 10,000 threshold provides legal certainty: businesses with small errors below AED 10,000 are not legally required to go through the full VD process if they have an upcoming return. Qaspro Global advises all clients to document the date they discover any tax error, as the 20-business-day deadline runs from that date for errors above AED 10,000.
| Error Amount | Action Required | Deadline |
|---|---|---|
| More than AED 10,000 underpaid | File Voluntary Disclosure with FTA | Within 20 business days of discovery |
| AED 10,000 or less underpaid | Correct in next available tax return | In the next return not yet due |
| AED 10,000 or less, no return available | File Voluntary Disclosure | Within 20 business days of discovery |
| Overstated refund over AED 10,000 | File Voluntary Disclosure with FTA | Within 20 business days of discovery |
| Overstated refund AED 10,000 or less | Correct in next available tax return | In the next return not yet due |
Change 2: How Long Must You Keep Records If Your UAE Tax Refund Is Still Pending?
Cabinet Decision No. 17 of 2026 added a new paragraph to Article 3 of the regulation, which governs the period for which businesses must retain accounting records and commercial books.
The new rule states: if a taxable person has a pending refund application that has not yet been decided by the FTA, and that application was submitted within five years from the end of the relevant tax period, the person must retain all related records for an additional two years beyond the standard five-year retention period.
In practice, this means that if you submitted a VAT or corporate tax refund application and the FTA has not yet issued a decision, your record retention obligation extends. Under the existing rules, the standard retention period is:
- Five years from the end of the tax period for taxable persons
- Five years from the end of the calendar year for non-taxable persons
- Seven years for real estate records
The new addition means a business whose refund is still under FTA review at the end of year five must keep those records for two more years, or until the refund decision is finalised, whichever comes first. This is particularly relevant for businesses with large VAT credit balances that have been pending refund for extended periods. See our guide on UAE VAT credit expiry and the 5-year refund deadline for the refund application process.
Change 3: Can the FTA Now Hold Your Business Documents Longer Than Originally Stated?
Cabinet Decision No. 17 of 2026 added a new clause to Article 18, which governs the FTA’s power to seize and retain documents and assets during a tax audit.
Under the previous rules, the FTA was required to provide a seizure record specifying the expected period of seizure. The new clause 10 of Article 18 now explicitly allows the FTA to extend the seizure period beyond the originally stated duration, provided that the concerned person is notified where possible.
What this means practically:
- During a tax audit, the FTA can seize your accounting records, commercial books, digital files, and physical assets
- Previously, the seizure was expected to last only as long as stated in the seizure record
- Now, the FTA can extend that period if the audit requires it, with notification to the business
- The phrase “where possible” in the law means notification is required but the FTA has some discretion in cases where the business is uncontactable
For businesses currently under FTA audit, this is a meaningful change. If your documents have been seized and the stated seizure period expires, do not assume the documents will be returned automatically. The FTA now has legal authority to extend the retention period. Businesses should maintain digital copies of all records before any FTA audit begins to ensure continuity of operations if originals are seized.
Change 4: UAE Tax Refund Deadlines — The FTA Now Has Only 20 Business Days to Respond
Article 26 of the regulation, which covers credit balance refund procedures, was amended by Cabinet Decision No. 17 of 2026. This amendment creates a binding timeline on the FTA to process refund applications.
The amended Article 26 states:
- The FTA must decide on a refund application and notify the taxpayer within 20 business days from the date of submission. If more time is needed, the FTA can extend this period but must notify the taxpayer accordingly.
- Where the FTA approves the refund, it must initiate repayment procedures within 5 business days from the notification of approval.
- The FTA retains the right to defer a refund if outstanding tax returns have not been submitted. Once all outstanding returns are filed, the refund must be processed.
This is a taxpayer-friendly change. Previously, there was no explicit statutory deadline for the FTA to decide on refund applications in the executive regulation. The new 20-business-day decision deadline and 5-business-day payment initiation requirement create accountability and give businesses a clear timeline to plan their cash flows around expected refunds.
| Refund Stage | FTA Obligation | Timeline |
|---|---|---|
| Decision on refund application | FTA must decide and notify taxpayer | Within 20 business days of submission |
| Extended review | FTA may extend with prior notification to taxpayer | Extended period must be notified |
| Repayment initiation | FTA must start repayment process | Within 5 business days of approval notification |
| Deferral for outstanding returns | FTA can defer until all returns filed | Refund released upon filing of outstanding returns |
Change 5: Stricter Rules on How the FTA Shares Your Tax Data with Government Agencies
Article 28 of the regulation, which governs confidentiality and disclosure of taxpayer information, was also amended. The specific paragraph covering disclosure to competent government entities was updated to require that any agreement between the FTA and a government entity must now specifically address: the permitted use of the information disclosed, the procedures that must be followed for control, security, subsequent disclosure, accuracy of information, and access to the information by individuals.
This is primarily an internal governance change affecting how the FTA shares taxpayer data with other UAE government departments. For most businesses, this change has no direct compliance obligation. It strengthens taxpayer data protection by requiring more detailed inter-agency agreements before information is shared.
UAE Tax Procedures Regulation: Complete Guide to All 31 Articles (2026)
Cabinet Decision No. 74 of 2023, as amended by Cabinet Decision No. 17 of 2026, is the master operational rulebook for how UAE taxes are administered. Understanding the full regulation helps businesses anticipate FTA behaviour during audits, registration disputes, and refund delays. Here is a summary of all 31 articles:
| Articles | Subject | Key Rules |
|---|---|---|
| 1 | Definitions | Premises, assets, as defined in Federal Decree-Law No. 28 of 2022 |
| 2 | Record keeping content | Balance sheet, P&L, salary records, fixed assets, inventory, invoices, contracts |
| 3 | Record retention periods | 5 years general, 7 years real estate, extensions for disputes, audits, and pending refunds |
| 4 | Method of record keeping | Originals or electronic copies with identical data; readable copy producible on FTA request |
| 5 | Language | English accepted; FTA can require Arabic translation |
| 6 | Tax registration | 20 business days to notify FTA of changes to name, address, activities, legal entity |
| 7 | Licensing authority obligations | All licensing bodies must notify FTA within 20 days of license issuance or renewal |
| 8 | Legal representative | Must notify FTA of appointment within prescribed timeline; FTA notifies within 20 days of acceptance |
| 9 | Payment allocation | FTA allocates unspecified payments by seniority of debt |
| 10 | Voluntary disclosure | AED 10,000 threshold: over = VD within 20 days; under = correct in next return (AMENDED Apr 2026) |
| 11 | FTA notifications | Post, email, SMS, smart apps, electronic system, or posting at premises |
| 12-13 | Tax agent registration | 3 years (individuals), 1 year (firms); minimum 3 years tax/accounting experience |
| 14 | Tax agent obligations | Confidentiality, CPD, cannot participate in schemes that breach any law |
| 15-19 | Tax audit procedures | 10 business days advance notice; FTA can inspect premises, records, and accounting systems; results notified within 10 days |
| 20 | Tax assessment | Must state name, TRN, reference number, tax type, summary, reasons, and payment date |
| 21 | Penalty assessment | Must state violation, penalty amount, total due |
| 22-24 | Seizure, sale, and reconciliation | FTA can sell perishable seized goods at public auction; reconciliation in evasion cases: 50% pre-conviction, 75% post-conviction |
| 25 | Extension of deadlines | FTA can extend assessment review by 20 days; committee can extend objection by 60 days |
| 26 | Refund procedures | 20 days to decide, 5 days to initiate repayment (AMENDED Apr 2026) |
| 27 | Bankruptcy | Trustee must notify FTA within 20 days of appointment; FTA notifies trustee of due tax within 20 days |
| 28 | Confidentiality | FTA staff cannot disclose taxpayer data except in defined cases (AMENDED Apr 2026) |
| 29 | FTA information requests | FTA can request any accounting records from any person to fulfil its duties |
| 30-31 | Abrogation and enforcement | Replaces Cabinet Decision No. 36 of 2017; effective 1 August 2023 (Apr 2026 amendments effective 1 Apr 2026) |
5 Urgent Steps Every UAE Business Must Take After the April 2026 Tax Procedure Changes
Following the 1 April 2026 amendments, Qaspro Global recommends all UAE businesses take the following steps:
- Review any discovered tax errors immediately: If you or your accountant has identified an underpayment in any filed VAT or corporate tax return, check whether the amount exceeds AED 10,000. If it does, the 20-business-day VD deadline may already be running. See our guide on UAE voluntary disclosure procedures for the step-by-step filing process on EmaraTax.
- Check pending refund applications: If you have an open VAT refund request that is approaching the five-year mark, confirm whether the new two-year extension applies and update your record retention plan accordingly.
- Back up records before any FTA interaction: With the new FTA power to extend document seizure periods, always maintain digital copies of all financial records. If an FTA auditor visits, they can seize originals and now extend that seizure beyond the originally stated period.
- Track your FTA refund timeline: If you have a pending refund application submitted before 1 April 2026, the 20-business-day decision clock now applies. If the FTA has not responded within 20 business days, you have grounds to follow up formally.
- Ensure your voluntary disclosure procedures are updated: If your company has internal procedures for handling tax errors (common in larger businesses), update them to reflect the AED 10,000 threshold introduced by Cabinet Decision No. 17 of 2026.
Frequently Asked Questions: UAE Tax Procedures and Cabinet Decision 17 of 2026
What is Cabinet Decision No. 17 of 2026?
Cabinet Decision No. 17 of 2026 is a UAE Cabinet amending decision issued on 23 March 2026 and effective from 1 April 2026. It amends Cabinet Decision No. 74 of 2023, which is the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures. The key changes affect voluntary disclosure thresholds, record retention for pending refunds, FTA document seizure extension powers, and the refund decision timeline.
What is the new voluntary disclosure threshold in UAE from 1 April 2026?
From 1 April 2026 under the amended Article 10, a Voluntary Disclosure is mandatory within 20 business days only if the underpayment exceeds AED 10,000. For errors of AED 10,000 or less, businesses can correct the error in the next available tax return without a separate VD filing. If no upcoming return is available, a VD must still be filed within 20 business days.
How long must UAE businesses keep tax records from 1 April 2026?
The standard retention periods remain unchanged: five years for taxable persons, five years from end of calendar year for non-taxable persons, and seven years for real estate records. The new addition from Cabinet Decision No. 17 of 2026 is that if a refund application is pending and was submitted within five years of the tax period end, records must be kept for an additional two years beyond the standard period.
How long does the FTA have to process a tax refund in UAE?
Under the amended Article 26 effective 1 April 2026, the FTA must decide on a refund application within 20 business days of submission and notify the taxpayer. If the refund is approved, the FTA must initiate repayment procedures within five business days. The FTA can extend the 20-day period but must notify the taxpayer of the extension and the reason.
Can the FTA keep my documents indefinitely during a tax audit?
No, but the FTA can now extend the document seizure period beyond what was originally stated in the seizure record, under the new clause 10 of Article 18 added by Cabinet Decision No. 17 of 2026. The extension is permitted provided the concerned person is notified where possible. To protect your business, always maintain digital copies of all financial records before any FTA audit begins.
What law governs UAE tax procedures overall?
UAE tax procedures are governed by Federal Decree-Law No. 28 of 2022 on Tax Procedures. The detailed operational rules are in Cabinet Decision No. 74 of 2023 (the Executive Regulation), as amended by Cabinet Decision No. 17 of 2026 effective 1 April 2026. This framework applies to all UAE taxes including VAT, corporate tax, and excise tax.
Do the April 2026 changes affect how VAT errors are handled?
Yes. The voluntary disclosure changes under amended Article 10 apply to all UAE taxes, including VAT. If you discover a VAT underpayment of more than AED 10,000 in a previously filed VAT return, you must file a Voluntary Disclosure through the FTA’s EmaraTax portal within 20 business days of discovery. The penalty for late VD filing is 1% per month on the unpaid tax under the new penalty regime effective 14 April 2026.
Is there now a formal deadline by which the FTA must notify me of a tax audit result?
Yes, but this was already in the regulation before the April 2026 amendments. Under Article 19 of Cabinet Decision No. 74 of 2023, the FTA must notify the person subject to a tax audit of the audit results within 10 business days from the end of the audit. If you request access to the documents and data the FTA used, they must provide these within 10 business days of your request.
Need Expert Help with UAE Tax Procedures or an FTA Audit?
Qaspro Global, a UAE-based tax and accounting consultancy, handles voluntary disclosure filings, FTA audit support, tax record reviews, and full compliance assessments under the amended UAE tax procedures regulation. Contact us today for a free consultation on any pending tax errors or open refund applications.