Jaxa Chartered Accountants

UAE Corporate Tax Reminder – Don’t Miss the Opportunity to Waive the AED 10,000 Penalty

If your business registered for UAE Corporate Tax after the required deadline, you may still be eligible for the FTA Penalty Waiver Initiative.

✔ Businesses that have already paid the AED 10,000 penalty can get the same credited back to the EmaraTax portal.

What Should You Do?

Submit your First Corporate Tax Return (or Annual Declaration, where applicable) within 7 months from the end of the financial year.

📌 Example: A new business with its first CT year ending on December 31, 2025, incurred a delayed registration penalty of AED 10,000/-.

Condition for waiver: Submit the CT return on or before July 31, 2026.

✅ If you meet the above requirement, a reconsideration request is not required.

📢 UAE Corporate Tax Update - Shareholding Disclosure Requirements

The UAE Corporate Tax Return now requires following additional disclosures regarding shareholding.

• MNE Group Name (Optional)
• Ultimate Parent Company: Name & Country of Tax Residence (Mandatory), TIN/TRN (Optional)
• Immediate Parent Company: Name & Country of Tax Residence (Mandatory), TIN/TRN (Optional)

What should businesses do?

Gather the above information early and review the Shareholding disclosures carefully to ensure accuracy.

Early preparation essential to avoid delays and ensure compliance.

UAE VAT Update 🇦🇪

New 5-Year Time Limit for VAT Refund Claims

Effective from 1 January 2026

The UAE VAT Law now introduces a 5-year statutory time limit for claiming VAT refunds or recovering excess input VAT.

What this means:
• ✅ VAT refund claims must be submitted within 5 years.
• ✅ The time limit applies to eligible VAT refunds and excess recoverable input VAT.
• ✅ Businesses should review outstanding VAT credits and submit claims before the deadline.

⚠️ Claims submitted after the applicable 5-year period may no longer be accepted.

UAE VAT Update: Self-Invoicing Requirement Removed for Reverse Charge Mechanism (RCM)
Effective from 1 January 2026

The UAE VAT Law no longer requires businesses to issue self-invoices for transactions subject to the Reverse Charge Mechanism (RCM).

What Has Changed?
• ✅ Self-invoices are no longer mandatory for RCM transactions.
• ✅ Businesses must continue to account for VAT correctly under the Reverse Charge Mechanism.
• ✅ Supporting documents, such as supplier invoices, contracts, import records, and customs documentation, must be retained as required by the Executive Regulations.

Businesses should review their VAT processes and ensure proper documentation and compliance practices remain in place under the updated requirements.

Zero rate VAT on Education Sector

As per the new FTA guide, Educational services carry Zero rate VAT if:

✔ It is provided by a Qualifying Educational Institution; and
✔ It is provided as per Qualifying Curriculum.

Qualifying Educational Institution: recognised (licensed) by competent Government Authority.
Qualifying Curriculum: Courses recognised by competent Government Authority.

Review your existing VAT treatment to ensure compliance.

9 UAE VAT Mistakes That Trigger Penalties

✅ Late VAT Registration – Register within 30 days of crossing AED 375,000 turnover.
✅ Late VAT Return Filing – File returns within 28 days from end of tax period.
✅ Late VAT Payment – Settle VAT dues within 28 days from end of tax period.
✅ Incorrect VAT Returns – Ensure accurate reporting to avoid fines.
✅ Failure to Maintain Records – Keep complete VAT records as required.
✅ Late VAT Deregistration – Apply within the prescribed timeframe.
✅ Incorrect Information to FTA – Submit accurate updates and respond to notifications.
✅ Voluntary Disclosure Errors – Delays in rectifying errors can increase penalties.

Avoid costly fines by staying VAT compliant. Stay penalty-free.

Claiming a Business VAT Refund in the UAE?

Before submitting Form VAT311 on the EmaraTax portal, make sure you have these essentials ready:

✅ Valid Tax Invoices
Accurate sales and purchase invoices showing the correct TRNs and VAT amounts.

✅ Eligibility Evidence
Clear accounting records and reports supporting your excess input VAT credit or VAT overpayment claim.

✅ Export Documentation
Official customs declarations, shipping documents, and supporting evidence for zero-rated exports.

✅ Verified Bank Details
An official bank IBAN letter to ensure smooth and timely refund processing.

Avoid delays. Maximize compliance.

JAXA Chartered Accountants can help you prepare, review, and submit your VAT refund claim with confidence.

The Strategic Power of an External Audit 📈

✅ Compliance
Navigate UAE Corporate Tax and VAT requirements with confidence and accuracy.

🤝 Trust
Enhance credibility with banks, investors, and financial institutions through transparent financial reporting.

🛡️ Security
Reduce financial risks, strengthen internal controls, and identify irregularities before they become costly issues.

📊 Growth
Make informed business decisions with reliable financial insights and actionable recommendations.

Ensure Accuracy. Empower Growth.

Secure your business future with JAXA Chartered Accountants for professional external audit services that strengthen compliance, enhance transparency, and support sustainable business growth.

Are Your Documents Ready for a UAE VAT Refund Claim?

Ensure accurate documentations are retained as below:
• Valid Tax Invoices
• Proof of Vendor Payments for Input VAT
• Import Documents

Common Reasons Why UAE VAT Refund Claims are Delayed/Rejected
• Missing or Incomplete Documentation
• Non-Compliant Tax Invoices
• Ineligible Input VAT Claims
• Incorrect VAT reporting
• Late Submission of the Claim

Important Reminder: VAT Refunds must be claimed within 5 years from end of relevant tax period.

Call – to - Action: Let our experts assist with accurate VAT refund claims.