In short
In 2026 the UAE extended Small Business Relief to tax periods ending by 31 December 2029, set e-invoicing go-live dates for 2027, brought in Tax Procedures Law changes from 1 January 2026, amended VAT and excise penalties from 14 April 2026, and continued the corporate tax late registration penalty waiver.
UAE tax rules moved quickly in 2026. This summary lists the changes most relevant to owner managed companies and groups, with the official source for each, so you can check what applies to you.
Corporate tax
- Small Business Relief extended to 2029. Ministerial Decision 131 of 2026, issued on 29 July 2026, extends the relief to tax periods ending on or before 31 December 2029. It remains available to resident businesses with revenue of AED 3 million or less in the current and all previous tax periods, is elected in the return, and excludes qualifying free zone persons and members of large multinational groups.
- Late registration penalty waiver. The AED 10,000 late registration penalty is waived automatically when the first tax return is filed within seven months of the end of the first tax period, and penalties already paid are returned as a credit on EmaraTax. The FTA reported in May 2026 that more than 68,600 businesses had benefited.
- Audited financial statements. For tax periods starting on or after 1 January 2025, Ministerial Decision 84 of 2025 requires audited statements for taxable persons with revenue above AED 50 million and for every qualifying free zone person. See who needs audited statements for corporate tax.
- Qualifying activities for free zones. Ministerial Decision 229 of 2025 replaced the earlier list of qualifying activities, with effect back to 1 June 2023.
- Domestic minimum top-up tax. UAE entities of multinational groups with consolidated revenue of EUR 750 million or more are subject to a 15% minimum top-up tax for financial years starting on or after 1 January 2025 (Cabinet Decision 142 of 2024).
E-invoicing
The national e-invoicing system for B2B and B2G transactions goes live on 1 January 2027 for businesses with revenue of AED 50 million or more and on 1 July 2027 for others, each after appointing an accredited service provider. Ministerial Decision 197 of 2026 excluded VAT group transactions for 24 months and removed the UAE data storage requirement. Details in our e-invoicing service page.
Tax procedures and penalties
- Tax Procedures Law amendments. Federal Decree-Law 17 of 2025, effective 1 January 2026, sets a five year window from the end of the tax period to claim refunds or use credit balances, with transitional relief until 1 January 2027, and generally limits FTA audits to five years.
- VAT and excise penalties. Cabinet Decision 129 of 2025, in force from 14 April 2026, amended the administrative penalties for VAT, excise tax and tax procedures. It does not change the corporate tax penalty table.
What to do now
- Check whether you can elect Small Business Relief for your next return, and whether your revenue history still qualifies.
- If you registered late, file the first return within the seven month window so the penalty is waived.
- Confirm your e-invoicing wave and appoint an accredited service provider in time.
- Plan the year end audit around your corporate tax return if you are above AED 50 million or a qualifying free zone person.
- Review open refund positions against the new five year limit.
ZS is an FTA approved Tax Agency in Abu Dhabi. Our corporate tax team reviews these changes with you and files on your behalf.
Frequently asked questions
Has Small Business Relief been extended?
Yes. Ministerial Decision 131 of 2026 extends it to tax periods ending on or before 31 December 2029.
Is the corporate tax late registration penalty still waived?
Yes for the first tax period, if the first return is filed within seven months of the end of that period.
When does e-invoicing become mandatory?
On 1 January 2027 for businesses with revenue of AED 50 million or more and on 1 July 2027 for other businesses in scope.
Did the corporate tax penalties change in 2026?
The April 2026 penalty amendments cover VAT, excise and tax procedures. Corporate tax penalties remain those in Cabinet Decision 75 of 2023 as amended.
Sources: Ministerial Decisions 131 of 2026, 84 of 2025, 229 of 2025, 66 of 2026 and 197 of 2026; Federal Decree-Law 17 of 2025; Cabinet Decisions 129 of 2025 and 142 of 2024; FTA announcements of April and May 2026. Reviewed by the ZS tax team, October 2026.
Need help with this? ZS is an FTA approved tax agency in Abu Dhabi. See our corporate tax service or book a free one hour consultation.
