Your VAT credits from 2021 are expiring. December 2026 is your last chance.

By Consaya Editorial — 2026-07-16

Your oldest VAT credits are about to vanish. Federal Decree-Law No. 17 of 2025 just made that official.

The new rule caps VAT credit carry-forwards at five years. That means input tax you overpaid in early 2021 had a window to be refunded by early 2026. For some quarters, that window has already closed.

But here's the part that matters: the law includes a transitional relief period. If your five-year window expired before January 1, 2026, or falls within a year after that date, you get one more shot. You have from January 1 to December 31, 2026 to file a refund claim through the EmaraTax portal. After December 31, 2026, those credits cannot be recovered under any circumstances.

Gone.

The timeline is worth spelling out. A business that overpaid VAT in Q1 2021 technically had until Q1 2026 to claim that refund. The earliest of those deadlines have already passed. But the transitional window covers credits from roughly 2018 through early 2021 — the whole period when you were still figuring out how VAT worked in the UAE and may have accumulated balances you never bothered to chase.

Most businesses don't chase small credits. Some of them aren't small. If you had significant capital expenditure or import activity in those first few years, your carried-forward VAT could represent real money. A construction firm or an IT company that bought equipment in 2019 and 2020 might be sitting on five or six figures.

The FTA isn't going to call you and remind you. They don't care whether you file on time or in November under pressure. What matters to you is that claims filed late in the window do invite audit scrutiny even after the general limitation period closes. Don't leave this for the last quarter.

The compliance environment has tightened

This change sits inside a broader shift. Federal Decree-Law No. 16 of 2025 also rewrote parts of the VAT framework itself. The FTA's audit capacity has expanded. E-invoicing is rolling out. Early VAT years in the UAE — it only launched in January 2018 — were more forgiving. Now they're not.

The task itself is straightforward. Pull your VAT ledger back to 2018. Identify any carried-forward credits that are four years old or older. Calculate what's recoverable under the five-year rule and the transitional window. File through EmaraTax before December 31, 2026. That's the whole thing.

If you run a small consultancy or agency, this might be a morning's work. If you're a larger firm with multiple entities or complex import history, it's more involved. Either way, treating it as a second-half priority is how you end up filing in November in a rush.

Most accounting software keeps your VAT ledger current but doesn't automatically flag credits approaching expiration. That's on you to track. Some firms use Consaya to keep their books filing-ready and their quarterly VAT returns organized — it flags what's due and generates the filings you need without scrambling every month. Even if you're not using anything like that, the principle is the same: make this part of your compliance calendar now, not later.

December 31, 2026 isn't far away.