Federal Decree-Law No. 18 of 2022 · UAE Federal
Amends the VAT Law with effect from 1 January 2023: replaces more than twenty articles including definitions, place of supply, deemed supplies, registration exceptions and tax invoice rules, and adds Article 79 bis setting a five-year statute of limitation for FTA audits and assessments, with exceptions for evasion and failure to register.
Federal Decree-Law No. 18 of 2022 was the first substantive amendment of the VAT Law. Issued on 26 September 2022 and effective from 1 January 2023, it replaced 25 articles of Federal Decree-Law No. 8 of 2017 and added a new Article 79 bis on the limitation period. The Ministry of Justice legislation portal marks the replaced articles as Articles 1, 5, 7, 13, 15, 21, 26, 27, 30, 33, 36, 45, 46, 48, 55, 57, 61, 62, 65, 67, 74, 76, 77, 80 and 83, and attributes Article 79 bis to Article 2 of the amending decree-law. The amendment remains in force, although the limitation article it introduced was itself cancelled by Federal Decree-Law No. 16 of 2025 from 1 January 2026, when the subject moved to Article 46 of the Tax Procedures Law.
The changes that matter most to businesses are these. Article 15 lets the FTA except a taxable person whose supplies are all zero-rated from registration, whether already registered or not, and requires that person to report any change that ends the exception. Article 21 requires deregistration where taxable supplies stop or fall below the voluntary threshold over twelve months, and gives the FTA power to deregister a person whose registration may prejudice the integrity of the tax system, without the FTA losing its right to claim tax or penalties. Article 26 fixes the date of supply for contracts with periodic payments at the earliest of the invoice date, the payment due date, the receipt of payment or one year from delivery, and adds dates for deemed supplies and vouchers. Article 27 restates the place of supply of goods. Article 48 restates the reverse charge on imported goods and services. Article 55 restates the conditions for recovering input tax, requiring a retained tax invoice or import documents and payment of the consideration. Article 61 adds tax charged or treatment applied in error as a ground for adjusting output tax. Article 67 requires a tax invoice within 14 days of the date of supply. Article 76 lists the breaches for which the FTA must issue a penalty assessment, and Article 77 treats a non-registrant who obtains reverse-charge goods by claiming to be registered as a tax evader.
Article 79 bis, as added, barred the FTA from auditing or assessing more than five years after the end of a tax period, extended to four years after an audit notice given in time and one year after a voluntary declaration filed in the fifth year, barred voluntary declarations after five years, allowed fifteen years in cases of tax evasion or failure to register, and adopted the Civil Transactions Law grounds for interrupting the period. Those rules now live in the Tax Procedures Law and apply across all federal taxes, but for VAT periods audited between 2023 and 2025 this article was the governing text.
Every VAT registrant and every person required to register for VAT in the UAE, including businesses making only zero-rated supplies, importers using the reverse charge, suppliers under periodic-payment contracts, and any taxable person whose VAT periods from 2018 onwards were open to audit when the limitation rules took effect on 1 January 2023.
| Article 1 (replacing Article 15) | The FTA may, on request, except a taxable person from registration, whether or not already registered, where its supplies are only zero-rated; the person must report changes that end the exception, and the FTA may collect tax and penalties for the period of an exception it was not entitled to. |
| Article 1 (replacing Article 21) | A registrant must apply to deregister if it stops making taxable supplies or its taxable supplies over twelve consecutive months fall below the voluntary threshold; the FTA may itself deregister a person whose registration may prejudice the integrity of the tax system, without losing its right to claim tax or penalties. |
| Article 1 (replacing Article 26) | For contracts with periodic payments or consecutive invoices the date of supply is the earliest of the invoice date, the payment due date on the invoice, receipt of payment, or one year from provision of the goods or services; deemed supplies are dated on supply, disposal, change of use or deregistration, and vouchers on issue or later supply. |
| Article 1 (replacing Article 48) | A taxable person importing concerned goods or services for its business is treated as supplying them to itself and accounts for the tax under the reverse charge, with a separate payment mechanism where the goods' final destination is another implementing state. |
| Article 1 (replacing Article 55) | Input tax is recoverable in the first tax period in which the taxable person holds a compliant tax invoice or import documents and has paid the consideration or part of it as the regulation specifies, with any further Cabinet conditions. |
| Article 1 (replacing Article 61) | Output tax must be adjusted after the date of supply where the supply is cancelled, its tax treatment changes, the consideration is altered, goods are returned with a refund, or tax was charged or treatment applied in error, subject to a movement-of-goods exception. |
| Article 1 (replacing Article 67) | A registrant must issue a tax invoice within 14 days of the date of supply under Articles 25 or 26, subject to other periods or immediate issuance in cases the Executive Regulation specifies. |
| Article 1 (replacing Articles 76–77) | The FTA must issue an administrative penalty assessment within five business days for failing to display tax-inclusive prices, notify margin scheme use, comply with designated zone conditions or issue tax invoices and credit notes in time; a non-registrant obtaining reverse-charge goods by claiming to be registered commits tax evasion. |
| Article 2 (adding Article 79 bis) | The FTA may not audit or assess after five years from the end of the tax period, except within four years of a timely audit notice or one year of a fifth-year voluntary declaration; no voluntary declaration after five years; fifteen years for tax evasion or failure to register; interruption follows the Civil Transactions Law. Cancelled by Federal Decree-Law No. 16 of 2025 from 1 January 2026. |
The amendment restated Article 76, which obliges the FTA to issue an administrative penalty assessment for failing to display tax-inclusive prices, failing to notify margin scheme use, breaching designated zone conditions and failing to issue tax invoices or credit notes in time, with amounts set by Cabinet Decision No. 40 of 2017 as amended; and Article 77, which makes obtaining reverse-charge goods while falsely claiming to be registered an act of tax evasion punishable under the Tax Procedures Law.
The amended text is the VAT Law our clients have been filing under since January 2023, and three of its changes come up constantly. The 14-day invoicing rule in Article 67 decides whether a client's monthly billing run is compliant, so we build it into the invoicing procedure of every business we keep books for. The periodic-payment rule in Article 26 catches consultancy and rental clients who invoice late: the tax point arrives one year after the service even if no invoice was raised. And the five-year limitation in Article 79 bis shaped how we handled FTA audits of 2018 to 2020 VAT periods, which were the first to fall out of reach; from 2026 we apply the equivalent rule in the Tax Procedures Law instead, and we warn clients who never registered that the fifteen-year window still applies to them.
| Amends | Federal Decree-Law No. 8 of 2017 |
| Cited by | VAT Law |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
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