Key changes in Dubai, UAE in 2026 include a nationwide ban on single-use plastics, new tiered taxes on sugary drinks, and modernized VAT procedures, including a digital e invoicing system. Other major updates include standardized 12:45 PM Friday prayers, shorter Friday school hours, potential air taxi launches, and the introduction of a “GCC Grand Tours” unified visa.
The year 2026 is an important year for taxation and accounting in the UAE. The UAE adopted a Domestic Minimum Top-Up Tax to ensure an effective minimum tax of 15% for large multinational enterprises with consolidated revenues of €750 million or more. Moreover, it is rolling out mandatory e-invoicing under a decentralized “5-corner” model with pilot and implementation dates for large taxpayers in 2026–2027. The Federal Tax Authority also adjusted service fees effective 1 January 2026. These parallel developments increases the expectations placed on finance teams and accounting services in Dubai. They tighten timelines, raise the bar for documentation, and emphasizes on proper tax planning.
Corporate tax refinements and ministerial decisions in 2026
The basic corporate tax architecture has not been repealed. Taxable income up to AED 375,000 is taxed at 0 percent and taxable income above that is taxed at 9 percent. In late 2024 and through 2025 the Ministry of Finance issued further ministerial decisions to clarify treatment of specific activities and to tighten documentation and substance requirements. Those clarifications took practical effect through 2025 and remain the operational baseline in 2026. Businesses must align accounting policies, revenue recognition and intra-group charge documentation to this baseline because corporate tax computations now rely on those accounting inputs.
The Domestic Minimum Top-Up Tax (DMTT)
The DMTT ensures that large multinational enterprise groups that operate in the UAE meet a minimum effective tax rate of 15% in the UAE. The DMTT applies where an MNE has consolidated global revenues of €750 million or more in at least two of the four financial years immediately preceding the year of application. The DMTT is designed so that it protects the UAE tax base against top-up taxes claimed by other jurisdictions under the Pillar Two rules and to align the UAE with international tax reform. The effective application dates and operational rules were prepared so that substantial global groups started seeing the domestic top-up rules apply for fiscal years starting on or after 1 January 2025 and in practice this remains a live compliance requirement for 2026 operations and filings.
From a practical perspective, the DMTT changes how large multinationals manage their UAE tax positions. They must calculate effective tax rates on a jurisdictional basis and track adjustments to ensure the UAE ETR is at least 15%. That raises the need for precise country-by-country reporting, transfer pricing documentation, reconciliations between accounting and tax bases, and integrated tax provisioning in month-end and year-end processes.
Free zone clarifications, incentives and proposed credits for 2026
The UAE kept the special status of qualifying free zone persons but introduced clearer substance tests and compliance conditions to access preferential tax treatment. Ministerial clarifications in late 2024 and 2025 explain which activities and operational footprints are eligible. At the same time, the government has discussed targeted incentives, including refundable R&D tax credits in draft proposals. These proposals, if adopted, may take effect in 2026 or later and would require firms to track qualifying R&D spend and claim credits via specific tax filings. Businesses operating in free zones must therefore document operational substance and reconsider business models if they rely on automatic zero tax assumptions.
FTA service fees, digital tax certificates and administrative changes from 1 Jan 2026
The Federal Tax Authority implemented amendments to its service fees effective 1 January 2026. The changes adjust fees for a range of administrative interactions with the FTA and are set out in a cabinet decision and FTA announcements published in late December 2025. At the same time, the FTA removed fees for paper tax certificates and introduced free digital certificates with QR codes as of January 2026. These administrative changes lower friction in some areas while raising routine costs in others. Accounting teams must budget for the new fee schedule and ensure that routine FTA interactions are handled correctly to avoid unnecessary charges. When a company multiplies small administrative fees across many filings and requests, the total cost becomes material and affects outsourcing decisions. Accounting services in Dubai must thus design pricing and service packages that actively reduce the number of FTA interactions through quality control and correct filings the first time.
For accounting service in Dubai, the implication is obvious. Clients expect their service provider to manage registrations, keep calendarized deadlines, and submit accurate returns. Failure on these basics can trigger penalties that dwarf the costs of proper compliance. This creates an upward pressure on accounting fees where the value is in compliance assurance rather than raw data entry.
E-invoicing
The UAE is implementing an e-invoicing programme built on a decentralized “5-corner” model that uses accredited service providers and structured data formats. The programme requires machine-readable invoices and the transmission of certain invoice data to the FTA in near real time. The rollout comprises pilot phases and staged mandatory adoption. Large taxpayers with revenues above specified thresholds were required to appoint Accredited Service Providers by mid-2026 and prepare systems for mandatory issuance and exchange by January 2027 for many B2B and B2G transactions. The e-invoicing programme standardizes invoice formats and enforces data quality in a way that intersects VAT, corporate tax bookkeeping, and real-time controls.
What else changed on 1 January 2026
Transfer pricing, Country-by-Country Reporting and Advance Pricing Agreements (APAs)
Transfer pricing rules are now integral to corporate tax compliance in the UAE. The Ministry of Finance and the FTA issued transfer pricing guides and documentation requirements aligned to OECD standards. Country-by-Country Reporting obligations remain in place for UAE-headquartered MNEs above the revenue threshold, and the UAE provides a legal framework for APAs and MAP engagement. In late 2025 the UAE issued procedural guidance on Advance Pricing Agreements, giving taxpayers a route to certainty on cross-border pricing. Practical compliance now requires contemporaneous documentation, functional analyses, and a clear APA or benchmarking strategy where material related-party transactions occur.
Removal of self-invoicing for reverse charge imports
Previously, under the reverse charge mechanism (RCM) an importing business often issued a self-invoice to record the VAT on imported goods or services. From 1 January 2026 taxpayers are no longer required to issue self-invoices for RCM transactions. The VAT liability still remains with the taxable person, but the procedural burden of creating a separate self-invoice is removed. Taxpayers must keep supporting documentation for the underlying supply as specified in the Executive Regulations. The removal of the self-invoice step shortens processing but does not change the VAT charge or recovery rules.
Five-year limit on claims for excess recoverable input tax
The amendments set clearer limits on the period within which excess recoverable input tax can be claimed. Tax commentators and FTA summaries refer to a practical five-year window for claiming older VAT credits or applying transitional relief. This means businesses that expect to recover historic input VAT must act before the expiry of the relief window or risk losing the ability to claim. It gives businesses less time to find and fix old records when claiming refunds or credits.
Stricter documentary and legitimacy tests for input VAT
The FTA gave stronger guidance that input VAT may be denied where the supply appears illegitimate or lacks sufficient supporting documentation. The amendments give the FTA clearer authority to refuse input claims where invoices, TRNs, or supplier substance are questionable. Tax administrations will expect supporting contracts, delivery proofs and accurate supplier registration details. Practically, this raises the compliance bar for businesses that rely on informal or low-documentation suppliers. Accounting will need to hold stronger supplier files and do pre-claim validations monthly.
Transitional relief and deadlines in 2026
The Ministry of Finance published transitional relief measures for certain historical claims and credits. Transitional relief is available but runs on fixed deadlines, often up to 31 December 2026 for older claims according to public commentary. Companies must identify legacy VAT positions and prepare claims within the transitional windows. Missing these windows will usually close the ability to recover older VAT. Business owners should treat calendar 2026 as an active deadline year for legacy VAT work.
Closing summary
2026 is an inflection year. The corporate tax framework and the DMTT have changed the technical baseline for taxation. e-invoicing creates technical compliance tasks that sit at the intersection of accounting and IT. The FTA’s administrative changes and updated service fees create modest administrative cost pressures. For businesses, the takeaway is simple: move from ad hoc bookkeeping to integrated compliance. For providers, the takeaway is equally simple: offer tax-led accounting services that combine technical tax skill, ERP integration, and disciplined month-end controls. Accounting services in Dubai that deliver those three capabilities will be the ones that clients choose.
FAQ’s
- What happens if supplier gives me a fake invoice?
If an invoice looks fake or incorrect, the tax office may reject it. You may lose your VAT claim and get questioned. Always collect proper invoices and keep delivery proof.
- For any purchase made before 2026, can VAT still be claimed?
There are time limits for claiming old VAT. If you think you have a refund due from older purchases, check quickly because the window to claim closes after a few years. - What should be kept as proof for VAT and tax checks?
Keep invoices, receipts, delivery notes, and contracts. Save them electronically if possible. Good records make problems easy to solve. - Does this affect online shopping and cross-border purchases?
VAT and invoice rules also apply to online and cross-border sales. Sellers and buyers need the right paperwork to show who paid tax and where. - How long should business records be kept?
Keep records for several years. The exact time can vary, but a good rule is to keep them for at least five years. - If I get a fine, can it be appealed?
Yes, most of the time fines can be appealed. There is usually a process to explain what happened and ask for relief. Getting help from an accountant is helpful.
