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Update on Executive Regulation of Federal Decree Law on Tax Procedures
The UAE has been steadily refining its tax procedures framework to improve clarity, consistency, and administrative efficiency. With increasing focus on audits, refunds, and voluntary disclosures, certain practical gaps were observed in the existing regulations.
To address these and align procedural rules with evolving compliance scenarios, amendments have now been introduced to the Executive Regulations governing tax procedures, effective 1 April 2026.
The Federal Tax Authority vide Cabinet Decision No.17 of 2026[AN1.1] issued on 23 March 2026 (effective from 1 April 2026) has made amendments introduced to Cabinet Decision No. 74 of 2023[AN2.1] which were issued on 10 July 2023 (effective from 1 August 2023) on the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures.
We have summarized the amendments for easy reference and correlation with the Decree Laws.
| Article No. |
CD No. 74 of 2023 (eff. 1 August 2023) |
CD No.17 of 2026 (eff. 1 April 2026) |
Our Comments |
| 3(2) |
The Person shall retain books and records for additional periods in cases of dispute, ongoing Tax Audit, intention to conduct audit prior to expiry, and for one additional year where a Voluntary Disclosure is submitted in the fifth year from the end of the relevant Tax Period.
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In addition to the specified periods, the Person shall retain books and records for an additional period of two (2) years where a Taxable Person has submitted a refund application and the Authority has not issued a decision, provided the application was submitted within the prescribed time limits.
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Extends record-retention obligations in refund-pending cases and aligns the Executive Regulation with refund-related timelines under the Decree-Law.
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| 10(1) |
Where a Taxable Person becomes aware that a Tax Return or Tax Assessment is incorrect resulting in Payable Tax being less than due, the Taxable Person shall submit a Voluntary Disclosure.
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Introduces a monetary threshold of AED 10,000, requiring Voluntary Disclosure within 20 Business Days where exceeded, and allowing correction through a Tax Return where the difference does not exceed the threshold.
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Introduces proportional correction mechanics tied to value thresholds while maintaining mandatory disclosure requirements.
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| 18(9) |
The Authority may seize documents and records for the periods specified by it for the purpose of completing a Tax Audit.
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Clarifies that the Authority may retain seized records for periods exceeding statutory retention requirements where necessary for audit completion.
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Formally reinforces the Authority's powers to retain records beyond standard retention periods.
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| 24(6) |
The Authority may defer Tax refunds until outstanding Tax Returns are submitted.
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Confirms that refunds may be deferred until submission of all due Tax Returns, with any excess balance remaining refundable thereafter.
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Strengthens the compliance-linked approach to processing refund claims.
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- Extended record retention
Businesses may need to retain records for longer periods, especially in cases of pending refunds leading to increased documentation and storage requirements.
- Defined threshold for voluntary disclosures
The introduction of the AED 10,000 threshold brings clarity, allowing smaller discrepancies to be corrected through regular returns while enforcing stricter timelines for larger variances.
- Potential impact on cash flows
Refunds may be deferred until all pending tax returns are filed, which could impact working capital planning for businesses relying on timely refunds.
- Stronger audit and enforcement powers
The Authority's ability to retain records beyond standard timelines reinforces the need for robust documentation and audit readiness.
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