TaxSavvyAE

Refund or carry forward

Should I claim a refund or just carry the VAT credit forward?

The situation

You can carry an excess credit forward to offset future VAT, or request a refund. Since 2026, carry forward is limited to 5 years from the period the credit arose.

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

If you will have output VAT soon, carrying forward is simple and avoids an FTA review. If the credit will keep growing, as with exporters, request refunds regularly. Example: an exporter with steady credits of AED 30,000 a quarter should claim refunds at least yearly so nothing nears the 5-year limit.

What to do

  1. Forecast output VAT for the next year.
  2. If credits keep growing, plan regular refunds.
  3. Track each credit's age.
  4. Claim before 5 years pass.

We can do this for youVAT refunds: excess input VAT refund, 5-year limit, new residence refund for nationals and tourist refund context: AED 2,500

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