On 3 December 2025 the UAE Ministry of Finance published Federal Decree-Law 16 of 2025, revising the original 2017 Value Added Tax statute and setting an implementation date of 1 January 2026. Although VAT is a fiscal measure, the updates carry mobility implications for employers seconding staff to the UAE or reimbursing travel expenses.
Key changes include a simplified refund mechanism for non-resident businesses, removal of the Dh10,000 threshold for claiming input tax on accommodation, and clearer rules on zero-rating ‘export-of-services’ when the beneficiary is outside the GCC. The law also codifies penalties for late registration and introduces a voluntary-disclosure window—helpful for newly incorporated free-zone entities that missed earlier deadlines.
![Amended UAE VAT law takes effect 1 January 2026: implications for expatriates and cross-border businesses]()
For expatriate assignees, the most visible shift will be in corporate expense policies: hotel invoices below Dh3,000 can now be reclaimed without separate tax authority pre-approval, easing cash-flow on frequent short-stay trips between Dubai and Abu Dhabi. Relocation packages that gross-up housing allowances should be revisited, as the broader input-tax recovery may lower employers’ net costs.
Tax and immigration advisers stress the need for cross-functional coordination. A failure to align VAT registration addresses with recently introduced e-channels for residency visas could trigger system mismatches and fines. Training sessions for HR, finance and mobility teams are recommended before year-end.
The Ministry will issue executive regulations later this month; companies have until 31 December to update accounting systems and employee handbooks.
Key changes include a simplified refund mechanism for non-resident businesses, removal of the Dh10,000 threshold for claiming input tax on accommodation, and clearer rules on zero-rating ‘export-of-services’ when the beneficiary is outside the GCC. The law also codifies penalties for late registration and introduces a voluntary-disclosure window—helpful for newly incorporated free-zone entities that missed earlier deadlines.
For expatriate assignees, the most visible shift will be in corporate expense policies: hotel invoices below Dh3,000 can now be reclaimed without separate tax authority pre-approval, easing cash-flow on frequent short-stay trips between Dubai and Abu Dhabi. Relocation packages that gross-up housing allowances should be revisited, as the broader input-tax recovery may lower employers’ net costs.
Tax and immigration advisers stress the need for cross-functional coordination. A failure to align VAT registration addresses with recently introduced e-channels for residency visas could trigger system mismatches and fines. Training sessions for HR, finance and mobility teams are recommended before year-end.
The Ministry will issue executive regulations later this month; companies have until 31 December to update accounting systems and employee handbooks.
