The Federal Tax Authority (FTA) has issued Decision No. 9 of 2025, which outlines the circumstances under which the FTA may deny the refund of residual tax amounts where a taxable person is subject to a tax audit.
This decision introduces clearer controls around refund eligibility and strengthens the FTA’s audit and compliance framework.
Cases Where the FTA May Deny a Tax Refund
Under Decision No. 9 of 2025, the FTA may deny a refund request if any of the following conditions apply during a tax audit:
- Significant potential tax liabilities are identified based on information obtained during the audit
- There are sufficient grounds to believe that the person is involved in tax evasion
- The refund request relates to goods involved in tax evasion within the supply chain
- Any tax returns, for any tax type, remain outstanding
- Failure to provide information or documents requested by the FTA within the specified timeframe
- Lack of cooperation with the FTA during the audit process
Effective Date
The provisions of FTA Decision No. 9 of 2025 will be effective from 1 January 2026.
What Businesses Should Do
Businesses should ensure that:
- All tax returns are filed on time
- Records and documentation are complete and accurate
- Full cooperation is provided during any FTA audit
- Supply chain transactions are properly vetted for compliance
Proactive compliance will be critical to avoid delays or denial of tax refunds under the new framework.
