Introduction
The UAE continues to strengthen its tax governance framework through amendments to Cabinet Decision No. 74 of 2023 on the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures, and its amendments (“CD 74”), introduced by Cabinet Decision No. 17 of 2026 (“CD 17”), with such amendments coming into effect on 1 April 2026. The amendments are targeted but affect several procedural areas frequently encountered in practice. They therefore warrant careful consideration by Taxable Persons and their advisers.
As noted in the Ministry of Finance announcement, the changes are intended to enhance clarity, strengthen procedural consistency, and support taxpayer compliance and safeguards. The amendments were introduced following the changes made to the Federal Decree-Law No. 28 of 2022 on Tax Procedures, and its amendments (“TP Law”), which entered into force on 1 January 2026. As the UAE tax system continues to mature, understanding and implementing these amendments will be important for managing tax risk and ensuring ongoing compliance.
CD 74 remains the operative framework, as amended by CD 17. CD 74 established the procedural framework applicable across all federal taxes in the UAE. It governs matters such as record retention, Voluntary Disclosure, tax audits, refund procedures and the disclosure of taxpayer information. Since its introduction, certain provisions have presented some practical and interpretative considerations, particularly in relation to refund claims, corrections of prior returns, and extended audit procedures.
This article examines the key amendments to CD 74 and considers how they modify the existing procedural framework.
Legislative Context and Purpose of the Amendments
| Year | Instrument | Key Development | Policy Objective |
| 2023 | CD 74 | Introduced the Executive Regulation to the TP Law | Establish a unified procedural framework for federal taxes. |
| 2026 | CD 17 | Amended selected provisions of CD 74. | Clarify selected procedural rules, refine taxpayer correction mechanisms and, in certain areas, expand the procedural framework applicable to the FTA. |
Key Amendments to CD 74
Article (3) – Record Retention
The amendment to Article 3 addresses situations where a refund application remains pending before the Federal Tax Authority (“FTA”). Prior to the amendment, CD 74 already required extended retention periods in certain circumstances, including ongoing disputes, tax audits and Voluntary Disclosures submitted close to the end of the ordinary retention period. CD 17 introduces a further category linked specifically to pending refund applications.
| Aspect | Position under CD 74 | Position after CD 17 | Practical Effect |
| Pending refund applications | No specific extension applied where a refund claim remained undecided by the FTA. The ordinary retention period continued to apply. | A person must retain the relevant books and records for an additional (2) two years where a refund application has been submitted (in a timely manner) and the FTA has not yet issued a decision. | Businesses with pending refund claims may need to retain records beyond the ordinary period. |
The amendment inserts a new paragraph (e) into Article 3(2), requiring a person to retain books, records and supporting documents for an additional (2) two-year period where a refund application remains pending before the FTA. The extension applies where the refund application was submitted within the applicable time limits set out under Article 38 of the TP Law.
The amendment ensures that supporting documentation relating to a refund claim remains available for review for as long as the claim is pending before the FTA. In practice, this is particularly relevant for taxpayers with recurring refund positions or claims that remain under review beyond the ordinary retention period. Accordingly, taxpayers should no longer assume that the standard retention period will always apply. Where a refund claim remains outstanding, the effective retention period may extend beyond the standard period in a straightforward pending-refund case and potentially longer where other extensions under Article 38 also apply.
This change indicates a closer alignment between record retention obligations and the lifecycle of refund verification processes, with an expectation that supporting documentation remains available for the duration of the FTA’s review, irrespective of standard statutory timelines.
Article (10) – Voluntary Disclosure
The amendments to Article 10 refine the treatment of overstated refund applications, aligning them more closely with the existing materiality threshold. Under CD 74, where a taxpayer became aware that a refund application submitted to the FTA claimed an amount greater than the amount properly refundable, a Voluntary Disclosure was generally required within 20 business days. However, where the overstatement arose from an incorrect Tax Return or Tax Assessment, the position was governed by Article 10(1).
CD 17 aligns the treatment of overstated refund claims arising from incorrect Tax Returns or Tax Assessments with the existing AED 10,000 materiality threshold already applicable under Article 10(1).
| Aspect | Position under CD 74 | Position after CD 17 | Practical Effect |
| Errors in Tax Returns or Tax Assessments giving rise to additional tax | A Voluntary Disclosure was required where the error exceeded AED 10,000. Errors of AED 10,000 or less could generally be corrected in a subsequent Tax Return where available. | The AED 10,000 threshold itself remains unchanged. | The existing correction mechanism for Tax Return errors remains unchanged. |
The amendment aligns the treatment of overstated refund applications arising from an incorrect Tax Return or Tax Assessment with the existing correction mechanism under Article 10(1). Accordingly, where the overstatement exceeds AED 10,000, the taxpayer must submit a Voluntary Disclosure within 20 business days of becoming aware of the error. Where the overstatement is AED 10,000 or less, the taxpayer may instead correct the error through the next Tax Return that has not yet become due, or through the Tax Return for the period in which the error is identified, whichever is earlier. A Voluntary Disclosure will only remain necessary where no future Tax Return is available through which the correction can be made, for example where the taxpayer has deregistered.
The amendment therefore does not introduce a new materiality threshold, but instead extends the existing AED 10,000 threshold to overstated refund claims arising from incorrect Tax Returns or Tax Assessments. This creates greater consistency between the rules governing underpaid tax and overstated refunds. In practice, taxpayers should ensure that internal review procedures distinguish between errors that may be corrected through a subsequent Tax Return and those requiring a Voluntary Disclosure, as incorrect treatment may still give rise to penalties in the context of a Tax Audit.
Article (18) – Retention of Seized Documents and Assets
Article 18 specifies the FTA’s audit and seizure powers, allowing the Tax Auditors to seize, retain and provide access to documents and assets. Where documents or assets were seized, the FTA is legally required to provide a record stating, among other things, the expected period during which the seized documents or assets would remain in its possession.
The amendment inserts a new Clause (10) into Article 18, expressly permitting the FTA to extend the period originally specified under Article 18(4)(d) during which seized documents or assets are retained. The only procedural safeguard is that the concerned person should be notified, where possible.
| Aspect | Position under CD 74 | Position after CD 17 | Impact |
| Period of seizure of documents or assets | The FTA was not permitted to extend the period it originally specified for which seized documents or assets would be retained. | The FTA may now expressly extend that period, provided the concerned person is notified where possible. | Greater flexibility for lengthy or complex audits. |
Although concise in drafting, this amendment has practical implications. It confirms that the retention period originally specified by the FTA is no longer definitive and that the FTA may continue to retain original records or assets where the Tax Audit remains ongoing. The notification requirement introduces a procedural safeguard by requiring the affected person to be informed, where possible, of any extension.
Article (26) – Refund Procedures
| Aspect | Position under CD 74 | Position after CD 17 | Effect |
| Terminology used for refund applications | Article 26 referred generally to “Tax refund” and “Tax refund procedures”. | Article 26 now consistently refers to “credit balance refunds” and “credit balance refund procedures”. | Clarifies that Article 26 applies specifically to applications for the refund of a credit balance, rather than to tax refunds more generally. |
The amendments to Article 26 are primarily terminological and do not materially alter the substantive refund process. The procedural framework remains unchanged: the FTA must decide on an application within 20 business days (or such longer period as may be notified), and where the application is approved, the refund must be processed within five business days. The FTA may also continue to defer the refund until all outstanding Tax Returns have been submitted.
The revised wording now consistently refers to “credit balance refunds” and “credit balance refund procedures”, including in Clause (4), which provides that the FTA may defer a credit balance refund until all due Tax Returns have been filed.
The amendment is therefore clarificatory in nature. It aligns the terminology used in Article 26 with the amended wording of Article 38 of the TP Law, which similarly refers to applications for refund of a credit balance. This confirms that Article 26 is intended to govern only the refund of amounts standing to the taxpayer’s credit, rather than all forms of tax refund more generally.
Article (28) – Confidentiality and Disclosure of Information
| Aspect | Position under CD 74 | Position after CD 17 | Effect |
| Disclosure to government entities | Disclosure to another government entity was permitted where approved by a Board decision and supported by an concluded memorandum setting out permitted use and security arrangements. | Disclosure is now only permitted pursuant to an agreement with the FTA that expressly ensures confidentiality and data protection, in addition to specifying permitted use, security and onward disclosure restrictions. | Introduces stronger safeguards around taxpayer information and more formalised controls on inter-agency data sharing. |
The amendment to Article 28 strengthens the procedural safeguards that apply where the FTA discloses taxpayer information to another government entity. Under the previous wording, disclosure was permitted where the relevant authority had been designated by a decision of the Board and a memorandum had been concluded dealing with the permitted use, control and security of the information.
Under the amended provision, disclosure remains limited to competent government entities designated by a decision of the Board but is now additionally subject to an agreement concluded with the FTA that specifically ensures the confidentiality and protection of data. The agreement must also specify the permitted use of the information, the procedures governing security, monitoring, onward disclosure and data accuracy, and the persons who may access the information.
The amendment reinforces the legal framework governing data governance and inter-agency information sharing. While the scope of entities to which disclosure may be made remains linked to Board designation, the amended provision introduces a more structured and robust framework governing how taxpayer information may be used, protected and disclosed.
Practical Implications for Businesses and Taxpayers
The amendments introduced by CD 17 have practical implications for businesses across several commonly encountered procedural areas. The extension of record retention requirements where refund applications remain pending will require businesses to reassess their document retention policies, particularly those with recurring credit balance positions or prolonged refund reviews. Businesses can no longer assume that standard statutory retention periods will apply in all cases and should ensure that supporting documentation linked to refund claims remains readily available for extended periods.
The revised Voluntary Disclosure framework applies the existing correction mechanism more proportionately to overstated refund claims arising from incorrect Tax Returns or Tax Assessments, reducing compliance burden in cases involving lower-value errors. While this provides greater flexibility, it also places increased responsibility on businesses to accurately assess the nature and materiality of errors, as incorrect correction methods may still expose taxpayers to penalties during audits.
In addition, the explicit power granted to the FTA to extend the retention of seized documents and assets signals the potential for longer and more complex audit processes. Businesses should prepare for the operational and governance implications of extended audits, including managing access to records and maintaining audit readiness. Finally, enhanced safeguards governing the disclosure of taxpayer information reinforce the importance of data governance and provide greater certainty around confidentiality in inter‑agency information sharing.
Conclusion
The 2026 amendments to CD 74 represent a measured but significant evolution of the UAE’s tax procedural framework. While the amendments do not fundamentally alter the underlying system, they enhance clarity, consistency, and proportionality in key compliance areas, particularly in relation to credit balance refunds, record retention, and the correction of errors in Tax Returns and refund applications.
As the UAE tax regime continues to mature, these changes underscore the importance of robust compliance processes, proactive management of refund and audit exposure, and clear internal governance around tax reporting and documentation. Businesses that adapt their procedures to reflect the amended requirements will be better positioned to manage tax risk, reduce disputes, and ensure ongoing compliance within an increasingly structured regulatory environment.
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