UAE VAT & Tax Update 2026: 6 New Rules for Businesses

The year 2026 will usher in a series of important regulatory and tax changes across the UAE, including major updates under UAE Tax Changes 2026. These reforms will impact everything from public health and environmental policies to VAT compliance, banking security, and digital content regulations.

While large national initiatives — such as Etihad Rail and the GCC unified visa — are already underway, these new rules will have a direct effect on residents, businesses, content creators, and financial institutions.

As 2026 approaches, it’s crucial for both individuals and companies to understand the implications of the UAE Tax Changes 2026 and prepare accordingly.

Below is a complete overview of the six key rules coming into effect and what they mean for the UAE community.

Understanding the Implications of UAE Tax Changes 2026

The UAE Tax Changes 2026 will have a significant impact on both residents and businesses, requiring careful adjustments to financial strategies and operational practices.

Being well-informed about these updates is essential to:

Ensure full compliance with new regulations
Avoid potential penalties or fines
Strategically plan for financial and operational efficiency

These changes are sector-specific, meaning that different industries — from retail and finance to digital content and manufacturing — will experience unique implications. Staying proactive and understanding the scope of the UAE Tax Changes 2026 will help individuals and organizations navigate the new regulatory landscape successfully.

1️⃣ Tiered Sugary Drink Excise Tax

The UAE Ministry of Finance will replace the current flat 50% excise tax on sugar-sweetened beverages with a tiered system, where tax rates vary depending on sugar concentration.

Higher sugar content → higher tax
Lower sugar content → reduced tax

Purpose of the reform:

Harmonises UAE excise rules with the GCC unified excise framework
Encourages manufacturers to reduce sugar levels
Supports national public health initiatives
Provides consumers with more low-sugar options

This reform aims to reduce sugar consumption while maintaining a fair and proportionate tax system.

2️⃣ Full Ban on Single-Use Plastics

The UAE will implement a nationwide ban on specific single-use plastic products, supporting environmental sustainability and public health

Banned items in Dubai from 2026:

Plastic cups and lids
Disposable cutlery
Food containers
Plates

3️⃣ New VAT Rules for UAE Businesses

Federal VAT amendments will simplify compliance and improve clarity for taxpayers.

Self-invoicing under the reverse charge mechanism is no longer required
Businesses must maintain standard documentation (contracts, supplier invoices)
VAT refund claims must be submitted within five years; late claims will be rejected

Impact:

Reduces administrative burden
Prevents prolonged refund backlogs
Provides businesses with greater certainty around VAT obligations

These changes align the UAE VAT system more closely with international best practices.

4️⃣ Banks to Replace SMS & Email OTPs – March 2026

The UAE Central Bank has instructed all banks to discontinue SMS and email OTPs.

New system:

Secure in-app authentication via official banking apps

Benefits:

Protects against SIM-swap and phishing attacks
Reduces interception risks
Enhances overall mobile and online banking security

Businesses and individuals must prepare for this transition to ensure smooth financial operations.

5️⃣ Advertiser Licence Mandatory for Content Creators – Deadline: January 31, 2026

The UAE Media Council now requires all influencers, advertisers, and content creators to obtain the Advertiser (Mu’lin) Licence, even for unpaid promotional content.

Licence details:

Valid for one year, renewable
Free for residents for the first three years
Applications via uaemc.gov.ae

Purpose:

Improves transparency in digital advertising
Ensures responsible content creation
Protects consumers from misleading promotions
Strengthens the UAE media regulatory framework

This requirement applies to creators, agencies, and brands producing promotional content across all platforms.

6️⃣ New Digital E-Invoicing System for Businesses – Starting July 2026

The UAE Ministry of Finance is rolling out a national Electronic Invoicing (E-Invoicing) System, marking a shift toward a fully digital tax ecosystem.

Requirements:

Issue, receive, and store all B2B and B2G invoices electronically

Implementation timeline:

July 1, 2026: Pilot phase
Subsequent phases: Gradual national rollout

Benefits of e-invoicing:

Faster invoice processing
Reduced risk of fraud
Lower manual workload and errors
Improved tax reporting accuracy
More efficient audits and compliance checks

This aligns the UAE with global digital tax systems in the EU, KSA, and other advanced markets.

The UAE Tax Changes 2026 are reshaping the regulatory and financial landscape, affecting taxation, compliance, sustainability, banking, and digital operations.

Early preparation ensures:

Smooth regulatory compliance
Avoidance of penalties
Operational efficiency and financial stability

Businesses and residents should stay informed and plan ahead to navigate these changes effectively.

For expert guidance on VAT compliance, corporate tax planning, e-invoicing readiness, and business setup in the UAE, contact KrezKo — your trusted partner for 2026 tax and regulatory compliance.

Frequently Asked Questions – UAE VAT Changes 2026

1. What happens if my VAT credit balance is older than five years?

If a VAT credit balance exceeds the five-year limit, you cannot use it to offset VAT liabilities or request a refund. To avoid losing eligible credits, it’s recommended to review your VAT credits annually. If you’re unsure whether any credits are nearing expiry, a VAT specialist can help verify your balance.

2. Does the 2026 VAT update apply to all businesses in the UAE?

Yes. The amendments apply to both mainland companies and free zone entities. While the impact may vary depending on how your business operates, the new rules are applicable to all businesses across the UAE.

3. What documents do I need to keep for reverse charge transactions from 2026 onward?

From 2026, self-invoicing under the reverse charge mechanism is no longer required. However, businesses must maintain clear records that include: What was purchased Supplier details Value of the supply Date of transaction Typical documentation includes contracts, supplier invoices, purchase orders, or import documents. The exact list will be confirmed in the updated regulation.

UAE VAT & Tax Update 2026: Six New Rules Impacting Businesses & Daily Life