Five-year limit on excess input VAT
We have had an input VAT credit for years. Is there a time limit to use it?
The situation
From 1 January 2026, excess recoverable VAT can be carried forward or refunded only within 5 years from the end of the period in which it arose. Transitional rules gave extra time until 31 December 2026 for older credits.
The law
- Art 74, Federal Decree-Law 8 of 2017 as amended from 1 January 2026: Refund of excess recoverable tax; carry forward or refund only within 5 years
What it means for you
Example: a credit that arose in the quarter ending 31 March 2021 passed 5 years on 31 March 2026, so under the transition you must request a refund or allocate it by 31 December 2026. After that, the credit is lost. Review your EmaraTax balance now.
What to do
- Check the credit balance and the period it arose.
- Identify credits older than or near 5 years.
- File refund requests before 31 December 2026.
- Track newer credits against the 5-year line.
We can do this for youVAT return filing (VAT201) on EmaraTax: output and input VAT, reverse charge, corrections and payment: AED 850