In a continuous effort to modernize the national tax framework, the UAE Ministry of Finance recently issued Cabinet Decision No. 198 of 2025. This decision introduces pivotal amendments to the existing Executive Regulation (Cabinet Decision No. 37 of 2017).
Effective from January 1, 2026, these changes focus on enhancing procedural clarity, tightening compliance requirements, and streamlining the recovery of deductible tax. For businesses dealing with excise goods, understanding these nuances is critical for maintaining seamless operations and avoiding administrative frictions.
Key Amendments Introduced by Cabinet Decision No. 198 of 2025
Refined Tax Registration Protocols
The 2025 amendments bring a more structured approach to the effective date of registration, particularly for cases involving secondary liability.
- Effective Date Clarity: Under the amended Article 3, the effective date of tax registration for persons responsible for tax due to the failure of others (under Article 5 of the Decree-Law) is now explicitly defined. It begins on the first day of the month when the person became aware or should have reasonably become aware to meet the tax payment requirements.
- Proactive FTA Registration: The Authority now holds broader powers to register a person unilaterally if they fail to comply with registration standards. This registration becomes effective from the date the obligation originally arose, ensuring no “tax gaps” exist.
Enhanced Flexibility in Tax Deductions
One of the most welcomed changes for taxable persons is the increased flexibility regarding the timing of tax deductions under Article 16.
- Extended Deduction Window: Previously, deductions had to be claimed in the same tax period, in which the right to deduction arose. The 2025 amendment allows taxable persons to deduct tax in the subsequent tax period as well. This provides a much-needed buffer for businesses.
Procedural Rigor at Customs
To safeguard public revenue, the role of Customs Departments has been further integrated with the FTA’s risk-based approach under Article 19.
- Risk-Based Reconciliations: Customs authorities will now reconcile the type and quantity of excise goods imported into or exported from the State based on a “tax risk matrix” determined in coordination with the FTA.
Modernized Refund and Audit Framework
The amendments introduce critical updates to the refund application process under Article 21, aligning them with the broader Tax Procedures Law.
- Statute of Limitations: Refund applications for excess tax must now be submitted within the specific timeframes prescribed by the Tax Procedures Law, replacing the previous static five-year reference in the regulation.
Broadened Refund Eligibility for Non-Taxable Persons
Expanding on the 2023 reforms, the 2025 decision further clarifies the rights of non-taxable business entities regarding exports.
- Expanded Scope: Under Article 22, non-taxable persons conducting business can now claim refunds for excise tax previously settled not only by a Taxable Person but also by those excepted from registration subject to meeting conditions as stated in clause 3 & 4 of Article 22.
Conclusion
Cabinet Decision No. 198 of 2025 introduces targeted amendments to the Executive Regulation of the UAE Excise Tax Law, addressing specific procedural aspects relating to tax registration, deductible tax and refunds.
The amendments take effect from 1 January 2026 and should be read together with the existing provisions of the Decree-Law and Executive Regulation. Taxable and non-taxable persons dealing in excise goods should evaluate the applicability of these changes to their operations to ensure continued compliance.
Stay ahead of the change.
Team of Experts at RVG can help you review your compliance procedures before the amendments take effect on 1 January 2026.
📩 Connect with RVG today to ensure a smooth transition.
