For years, a VAT credit in the UAE behaved like a deposit: it sat on your account until you used it or asked for it, and nobody worried much about its age. Exporters, contractors and businesses that had a heavy build-out often carried six-figure balances for years. Federal Decree-Laws No. 16 and 17 of 2025 changed that. Credits now have a shelf life, and the oldest ones are on their last few months.
Which credits are affected, and by when
| Credit arose in a tax period ending… | Last day to claim or use it |
|---|---|
| From 2018 up to 31 December 2021 | 31 December 2026 (transitional window) |
| 31 March 2022 | 31 March 2027 |
| 30 June 2022 | 30 June 2027 |
| Any later period | Five years after that period ends |
What to do this quarter
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Find out how old your balance is
EmaraTax shows the balance, not its age. Rebuild it from your returns: list every period with a net refundable position and how much of each was later used against tax due. What remains, period by period, is what can expire.
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Decide: refund or offset
If you will owe VAT in the coming quarters, the credit may simply be used up against it, which counts. If not, request the refund; a credit you cannot use before it expires is worth nothing.
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File Form VAT311 early
From the VAT refunds section of EmaraTax, submit Form VAT311 with your supporting schedule, the key tax invoices, export evidence for zero-rated sales, and a bank letter confirming the IBAN in the registered name. A defect found in November leaves no time to fix it.
A bank letter whose account name does not match your EmaraTax registration exactly is one of the most common reasons a refund stalls.
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Keep the records longer
The FTA may audit a refund claimed under the transitional window within two years of the application, even though the period is old. Since April 2026 records must also be kept for two extra years while a refund application is pending.
Questions people actually ask
What happens to a credit I do not claim by 31 December 2026?
If it comes from a period covered by the transitional window, the right to refund it or use it lapses. It cannot be carried forward against future VAT after that.
Does using the credit against VAT due count as claiming it?
Yes. The law lets you request a refund or use the balance to pay tax or administrative penalties within the window. Either keeps the value.
Can the FTA audit an old period if I claim now?
Yes. For refunds requested under the transitional rule, the FTA can audit within two years of your application even if the normal five-year audit window has passed. Claim only what your documents support.
Where these facts come from
Checked against the following on 8 October 2026. Rules and dates change — if you are reading this long after that date, verify before you act on it.
- Baker McKenzie — UAE VAT and Tax Procedures Law amendments
- KPMG — Federal Decree-Laws No. 16 and 17 of 2025
- Federal Tax Authority — refund of excess tax paid
- Cabinet Decision No. 17 of 2026 (analysis)
WisoBooks is a bookkeeping and business-management tool, not an accounting, tax or legal advisor. Nothing on this page is tax advice, and tax rules change. Confirm your own obligations with the relevant authority or a qualified advisor.
