Tax Refund Deadline: What You Need to Know About the 5-Year Window

What Business Owners Need to Know Immediately

The most urgent change affecting UAE businesses is the introduction of a strict five-year limitation period for claiming tax refunds and credit balances. This applies across all federal taxes administered by the FTA.

This means companies needs to claim refunds for tax periods 2018-2020, or after 31st December 2026 the outstanding credit will be lost permanently.

Key Impact Points:

5-Year Hard Deadline: Businesses must request refunds of credit balances within five years from the end of the relevant tax period
No Indefinite Carryforward: Previously, tax credits could be carried forward indefinitely; this changes January 1, 2026
Applies to All Federal Taxes: Corporate Tax refunds, VAT excess credits, and Excise Tax overpayments all fall under this limitation
Use-It-or-Lose-It Rule: After five years, unclaimed refunds permanently expire and cannot be recovered

What Is the 3-Year Tax Refund Rule?

The FTA has provided limited transitional relief for businesses with outstanding credit balances from older tax periods:

Critical Action Required: Businesses have until December 31, 2026 to claim refunds for tax periods 2018-2020. After this date, these amounts are permanently forfeited.

Example Scenario: If your company filed a VAT return for Q1 2018 showing excess input VAT of AED 120,000 that was carried forward but never claimed, you have until December 31, 2026 to submit a refund application. Missing this deadline means losing AED 120,000 permanently.

Immediate Action Items for UAE Businesses:

Review All Tax Records from 2018-2020 – Identify unclaimed VAT credits, Corporate Tax overpayments, and Excise Tax refunds
Calculate Outstanding Credit Balances – Quantify exact amounts eligible for refund before the five-year window closes
Submit Refund Applications Urgently – File claims through the FTA portal before December 31, 2026
Document Everything – Maintain comprehensive records as the FTA can audit these transitional refund claims for up to two years

Take Action Now: How Jaca Tax Consulting Can Help

Comprehensive Review: We’ll examine your tax history to identify any unfiled returns or missed refunds from the past five years.

Accurate Preparation: Our experienced team will prepare or amend returns to maximize your eligible refunds and credits.

Deadline Management: We track critical deadlines so you never miss an opportunity to claim what’s yours.

Proactive Planning: Beyond recovering past refunds, we’ll implement strategies to ensure you capture every credit and deduction going forward.

What Happens If I Miss the Tax Refund Deadline?

Missing the tax refund deadline has serious consequences. Once the three-year window closes, your unclaimed tax refund is gone permanently. The IRS will not make exceptions, even if you have a valid reason for filing late.

Here’s what happens when you miss the deadline:

You lose all rights to your refund money. Even though you overpaid your taxes, that money becomes property of the federal government. You cannot apply it to future tax years or outstanding tax debts. If you owe back taxes from other years, the IRS won’t automatically apply your lost refund to those debts either.

The IRS will still accept your late return, but only to satisfy filing requirements. This is particularly important if you’re trying to claim Social Security benefits or need proof of income for loans or other purposes. However, you won’t receive any money back.

Remember: The IRS won’t notify you about unclaimed refunds. It’s your responsibility to file and claim them within the deadline. Let us help you protect what’s rightfully yours.

Tax Refund Deadline: What You Need to Know About the 5-Year Window

What Business Owners Need to Know Immediately

What Is the 3-Year Tax Refund Rule?

Immediate Action Items for UAE Businesses:

Take Action Now: How Jaca Tax Consulting Can Help

What Happens If I Miss the Tax Refund Deadline?

Have questions?
Get in touch!

+1 840 841 25 69

Tax Refund Deadline: What You Need to Know About the 5-Year Window

What Business Owners Need to Know Immediately

What Is the 3-Year Tax Refund Rule?

Immediate Action Items for UAE Businesses:

Take Action Now: How Jaca Tax Consulting Can Help

What Happens If I Miss the Tax Refund Deadline?

Have questions? Get in touch!

+1 840 841 25 69

Have questions?
Get in touch!