FTA Decision No.9 of 2025 – New VAT Refund Rules in the UAE

When a business submits a VAT refund and most of it is initially processed, any remaining balance (“residual amount”) can now be declined or withheld if the FTA believes there are compliance or risk concerns during an audit.

VAT Refund may be declined if:

• Audit findings indicate potential significant tax liabilities
• Requested information is not provided within the audit timeline
• The refund relates to goods suspected of tax evasion in the supply chain
• There are reasonable grounds to suspect tax evasion
• Outstanding tax returns exist for any tax type
• The taxable person fails to cooperate during the audit process

Key Takeaway:

Tax registrants must prioritize accurate reporting, timely submissions, and full cooperation during audits to prevent delays or complications in claiming refunds. With expert guidance, you can navigate the process efficiently, reduce risks, and maintain full compliance with regulations.