UAE Federal Tax Authority introduces new VAT regulations and AI refund platform

The UAE Federal Tax Authority (FTA) has introduced new measures regarding Value-Added Tax (VAT) implementation and digital services. Effective October 1, 2026, FTA Decision No. 17 of 2026 establishes specific conditions for businesses to recover input VAT on certain employee expenses. These expenses, which must be provided according to employment contracts or documented company policies, cover six categories: transportation, food and beverages, accommodation, temporary housing for new employees, mobile and internet services, and parking fees.

In a separate digital initiative, the FTA has launched an AI-powered platform for tourist VAT refunds in collaboration with Planet. The system, operational at Zayed International, Dubai International, and Sharjah International airports, utilizes facial recognition and automated verification to streamline the process. The platform aims to reduce manual intervention and detect unusual transaction patterns to ensure compliance. As of October 2026, the time required for tourists to receive refunds has decreased to one business day, down from approximately nine days previously.