What changes on 1 January 2026 — refunds, audit windows and you
The FTA's 2026 procedural updates tighten refund limits and extend audit periods. Here's what it means for your documentation calendar.
As of 1 January 2026, the Federal Tax Authority has introduced stricter five-year limits on tax refunds and extended the periods over which it may open an audit. For most groups, the practical effect is simple: the window in which your historical positions can be questioned has widened, and the window in which you can recover overpaid tax has narrowed.
Why documentation timing now matters more
A defensible Transfer Pricing position is only useful if it exists before the FTA asks for it. With extended audit periods, contemporaneous documentation — prepared in the year of the transaction — becomes the difference between a routine query and a reassessment.
What to do this quarter
- Reconcile your Master File and Local File coverage against MD 97 of 2023.
- Confirm your benchmarking sets are current and defensible.
- Build a standing "defence file" rather than reacting to an FTA request.