A new Cabinet Decision has been issued by the UAE government, aiming to streamline the procedures for government entities involved in tax disputes.

The decision, known as Cabinet Decision No. 12/2025, was published on 14 February 2025 and will come into effect on 14 April 2025.

It provides a structured framework for federal and local government entities to manage objections and appeals related to VAT on transactions conducted in their sovereign capacity.

The decision outlines that government entities must submit objections to the Tax Disputes Resolution Committee (TDRC) within 40 working days of receiving a decision from the authority.

Notably, these entities are not required to settle VAT and administrative penalties before submitting an objection.

The TDRC is mandated to decide on objections within 20 working days, and its decision is final if the total tax due and administrative fines do not exceed AED 100,000.

In terms of appeals, government entities or the authority can appeal TDRC decisions to the federal courts within 40 working days.

However, it is mandatory for the government entity to settle the VAT disputed with the authority before submitting the appeal.

Administrative penalties must be settled once a final binding decision is issued by the federal court.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit https://www.lexis.ae/lexis-middle-east-law/.