GTL Summary:

Article 74 outlines the procedures for handling excess recoverable tax. A taxable person is entitled to apply for a refund if their recoverable input tax exceeds the output tax for a tax period, or if tax paid to the Authority is more than the tax payable. This process is subject to the Tax Procedures Law and its Executive Regulation. The Authority must first offset any excess tax against outstanding payable tax or administrative penalties. If no refund is requested post-offsetting, the excess is carried forward to subsequent tax periods for a maximum of five years, after which the right to claim it lapses.

Document Type: Tax Law Article
Law: VAT (FDL No 8 of 2017, as amended)
Article Number: 74
Country: 🇦🇪 UAE
Location: Title 8 - Tax Period, Tax Returns, Settlement and Reclaiming of Tax › Chapter 3 - Carrying forward the Excess of Recoverable Tax and Tax Recovery
Order: 74
Last updated at: 2025-12-26 14:13:51 UTC

Title 8 - Tax Period, Tax Returns, Settlement and Reclaiming of Tax

Chapter 3 - Carrying forward the Excess of Recoverable Tax and Tax Recovery

Article 74
Excess Recoverable Tax[32]

  1. [Subject to the provisions of the Tax Procedures Law and its Executive Regulation, and without prejudice to the Authority's right to offset in accordance with the provisions of Clause 2 of this Article, the Taxable Person shall be entitled to apply to the Authority to recover excess Recoverable Tax, or part thereof, in accordance with the time limits and procedures specified in the Executive Regulation of this Decree-Law, in the following cases:

    1. If the Taxable Person's recoverable Input Tax set forth in this Decree-Law exceeds the Output Tax payable for the same Tax Period.

    2. If the Tax paid to the Authority by the Taxable Person exceeds the Payable Tax according to the provisions of this Decree-Law, other than in the instance mentioned in Paragraph (a) of Clause 1 of this Article.

  2. The Authority shall offset the excess Recoverable Tax against the Payable Tax or any Administrative Penalties imposed in accordance with the provisions of this Decree-Law or Tax Procedures Law.

  3. If no request is submitted to recover the excess after offsetting, the excess shall be carried forward to subsequent Tax Periods for a period not exceeding (5) five years from the end of the Tax Period in which the excess arose. In the event that no request to recover the excess has been submitted or it was not used to settle any Tax liabilities before the expiry of this period, the right to claim such excess shall lapse and may not be used to settle any Tax liabilities.][33][G50]

Footnotes

[32]Article amended as per Federal Decree-Law No. 18 of 2022.

[33]Clause amended as per Federal Decree-Law No. 16 of 2025.

GTL Notes

[G50] Article 74 amended by Federal Decree-Law No 16 of 2025 with effect from 1 January 2026. Prior to the amendment, the clause read as follows:
[1. Notwithstanding the provisions of the Executive Regulations of this Decree-Law, the taxable person shall carry forward any excess of the refundable tax to the subsequent tax periods and offset such excess against the payable tax or any administrative fines imposed pursuant to the provisions of this Decree-Law or Federal Law No. (7) of 2017 on Tax Procedures in the subsequent tax periods until such excess is fully utilized, in the following cases:
a. If the refundable input tax of the taxable person, pursuant to this Decree-Law, exceeds the payable output tax for the same tax period.
b. If the tax paid by the taxable person to the Authority exceeds the payable tax in accordance with the provisions of this Decree-Law, other than the case referred to in paragraph (a) of Clause (1) of this Article.
2. If there is any excess for any tax period after being carried forward for a period of time, the taxable person may submit to the Authority an application for requesting the refund of such excess. The Executive Regulations of this Decree-Law shall determine the time limits, procedures and mechanisms of returning any remaining excess to the taxable person.] [G51]

[G51] Article 74 amended by Federal Decree-Law No. 18 of 2022 effective from 1 January 2023. This replaces the following text:
1. With the exception of what will be stipulated in the Executive Regulation of this Decree-Law, the Taxable Person shall carry forward any excess Recoverable Tax to the subsequent Tax Periods and offset such excess against Payable Tax or any Administrative Penalties imposed under this Decree-law or Federal Decree-Law No (7) of 2017 on Tax Procedures in subsequent Tax Periods until such excess is fully utilised, in the following cases:
a. If the Taxable Person's Recoverable Input Tax set forth in this Decree-Law exceeds the Output Tax payable for the same Tax Period.
b. If the Tax paid to the Authority by the Taxable Person exceeds the Payable Tax according to the provisions of this Decree-Law, other than in the instance mentioned in paragraph (a) of Clause (1) of this Article.
2. If there remains any excess for any Tax Period after being carried forward for a period of time, the Taxable Person may apply to the Authority to reclaim the remaining excess. The Executive Regulation of this Decree-Law shall specify the time limits, procedures and mechanisms of returning any remaining excess to the Taxable Person.

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