The opportunity (and the risk) is the same: the teams who translate these updates into practical actions will stay calm and in control. The ones who treat them as “something for later” will feel it operationally—at month-end, during audits, and when deadlines land.

Here are four updates worth having on your radar—and the simplest next steps we recommend.

1) UAE e-Invoicing Guidelines (v1.0): scope is clearer, readiness matters

The Ministry of Finance released the UAE Electronic Invoicing Guidelines (Version 1.0) on 23 February 2026.
For CFOs, the most useful part is that it frames e-invoicing as an ecosystem with defined transaction types in scope and clear roles and responsibilities across stakeholders.

One detail that helps planning: the guidance outlines transaction scope by supplier/buyer type (e.g., B2B, B2G, etc.).

What to do next:

• Treat this as a readiness programme, not an IT ticket. Assign finance-led ownership and a cross-functional working group. 
• Map your invoice journey end-to-end (issue → approvals → send → rejections/credit notes → audit trail). 
• Start with data quality: consistent customer/supplier master data and structured invoice fields will save you later. 
• Clarify responsibility boundaries with your provider/ASP early (especially around errors, rejections and resolution). 

2) Excise Tax (ETGTP2): updated guidance on excise goods + calculations

The FTA’s Taxable Persons Guide (Excise Goods) — Excise Tax | ETGTP2 (February 2026) provides an overview of excise goods, including definitions/exclusions and how to calculate Excise Tax under both the Ad Valorem Model and Tiered-Volumetric Model.

It’s particularly relevant if your business imports, produces, stockpiles excise goods, or manages operations tied to designated zones/warehousing.

The guide also references administrative requirements connected to the Tiered-Volumetric model—such as obtaining certification relating to sugar content (where applicable).

What to do next:

• Confirm whether any of your product lines fall within excise categories and whether your current classification is still appropriate. 
• Pressure-test your excise calculation approach (model, valuation method, documentation). 
• If sweetened drinks are in scope for you, review the operational requirements around content verification and supporting evidence. 

3) Corporate Tax: new exemption route for certain sports entities

The Ministry of Finance issued Cabinet Decision No. 1 of 2026 relating to exempting certain sports entities from Corporate Tax under the Corporate Tax framework.

For qualifying entities, the key practical point is that exemption is conditional: entities may need to provide information to verify eligibility, and failing to meet conditions can result in losing exemption status for the relevant tax period.

What to do next:

• If you’re a sports entity (or connected/ancillary organisation), don’t assume exemption automatically applies—document eligibility and governance clearly. 
• Maintain discipline on “unrelated commercial activity” risk: exemptions often fail at the edges. 
• Prepare supporting documentation that could be requested to verify eligibility. 

4) EmaraTax process: Corporate Tax registration/resubmission via Tasheel Agent + UAE PASS

The FTA’s EmaraTax user manual outlines the process for Corporate Tax Registration and Re-Submission by a Tasheel Agent to assist the taxpayer via UAE PASS.

In plain terms: it’s a structured way for a Tasheel Agent to support registration steps while using UAE PASS authentication flows (including OTP and app-based confirmation).

What to do next:

• If your registration journey has complexity (group structures, multiple owners, documentation gaps), consider whether agent-assisted submission reduces friction. 
• Ensure internal readiness: UAE PASS access, updated contact details, and a clear document pack before starting the submission flow. 
• If you’re resubmitting after an “Awaiting Information” status, treat it like a mini project: gather evidence, align internally, then respond clearly. 

The bigger picture for CFOs

These aren’t random updates. They point to a clear direction: more digitisation, more structured data, clearer accountability, and tighter evidence trails.

The finance teams that will thrive are the ones who:

• keep compliance simple (but not simplistic), 
• build reliable processes, 
• and turn change into operational strength rather than last-minute stress. 

How Nishe can help

If you’d like support making this practical, we can help in three ways:

1. E-invoicing readiness review (process + data + controls + stakeholder roles) 
2. Tax guidance translation (Excise / CT updates → real actions and documentation) 
3. EmaraTax registration support (document pack + submission clarity + resubmission preparation) 

If you want to sanity-check your readiness, reach out to our team—happy to point you in the right direction.

While some changes focus on process improvements inside EmaraTax, others introduce new guidance that could affect VAT reporting, excise compliance, and corporate tax planning.

Here’s a clear breakdown of what’s changed and what it means for your business.

UAE Updates

1. Reactivating Deactivated Corporate Tax TRNs, Process Now Formalised

The FTA has released an official user manual explaining how businesses can reactivate a deactivated Corporate Tax TRN through EmaraTax.

This includes:

• Viewing deactivated TRNs
• Selecting “Reactivate TRN”
• Completing and submitting the reactivation request

The update removes uncertainty around the process and confirms it is now fully supported within the portal, not a workaround.

Why it matters:
Businesses restarting operations or becoming taxable again can now reactivate registrations more efficiently, but must ensure data accuracy before submission.

2. New Advance Corporate Tax Payment Option

A new optional feature allows taxpayers to make advance corporate tax payments before filing their return.

Key points:

• Completely voluntary
• Does not change filing deadlines
• Payments sit as credit and offset future liabilities

Why it matters:
This gives finance teams greater flexibility for cash-flow planning and reduces last-minute pressure before the filing deadline.

3. VAT Profit Margin Scheme — New Guide Released (VATGPM1)

The FTA has clarified how eligible resellers can apply VAT only on profit margins rather than full selling value.

Applicable to:

• Second-hand goods
• Antiques
• Collectors’ items
• Goods with restricted input VAT recovery

Key reminders:

• The scheme is optional
• No FTA approval required
• Specific invoicing and record-keeping rules apply

Why it matters:
Businesses in resale sectors may reduce VAT exposure — but only if applied correctly.

4. Updated Excise Tax Guide for Taxable Persons

The new excise guide reinforces compliance expectations for businesses dealing with tobacco, energy drinks, sweetened beverages and vaping products.

Highlights include:

• No minimum turnover threshold for registration
• Tax due upon import, production or release
• Tiered sugar-based taxation rules

Why it matters:
Excise compliance is tightening, and businesses must ensure timely registration, reporting and record-keeping.

Bahrain Updates

VAT Real Estate Guide — Lease Incentives Clarified

The updated guide confirms that lease incentives (rent-free periods, fit-out contributions, etc.) must be included when calculating VAT.

Why it matters:
Both landlords and tenants need to review agreements to ensure VAT reflects the full economic value of leases.

VAT Treatment of Manpower Services

New guidance clarifies VAT treatment for outsourced labour and staffing services.

Why it matters:
Businesses using recruitment agencies or contract staff should review invoices to ensure correct VAT treatment.

Final Thoughts

Across the GCC, tax systems are becoming more structured, digital and data-driven.

The trend is clear:

• clearer processes
• stronger compliance expectations
• more transparency in reporting

Businesses that stay informed and act early will avoid unnecessary risk and disruption.

At Nishe, we help organisations translate regulatory updates into practical action, from tax planning to system implementation.

This transition will not look the same for every organisation. A fast-growing SME will not have the same needs as a multinational group running complex ERP environments. That’s why this guide breaks down two clear pathways:

Most firms focus only on the 50 mandatory fields required for compliance

Conditional Mandatory (CM) and Optional fields are often ignored. E-invoicing standards include 200+ data fields in total

CM and Optional fields carry critical business, tax, and reconciliation value

Ignoring them leads to poor data quality, manual reconciliations, and limited automation. We handle all 200+ fields, not just the mandatory ones

Ensures: true compliance, better analytics & reporting, end-to-end automation readiness

We also explore data and process gap assessments, integration tips, training considerations, vendor selection, and realistic timelines — so UAE businesses can prepare with confidence, not pressure.

Why E-Invoicing Implementation Matters Now

E-invoicing isn’t just another regulatory box to tick. It represents a shift in how transactions are issued, exchanged, stored, and validated. Once implemented, invoices will move through an approved Accredited Service Provider (ASP) — using a structured digital format based on Peppol standards.

Success will depend on early decision-making:
➡️ Choosing the right solution
➡️ Preparing data
➡️ Training teams
➡️ Aligning systems and processes

Starting now gives businesses time to solve issues before invoices become non-compliant — and penalties apply.

Implementation Pathway for SMEs: Simple, Fast, and Cost-Effective

For SMEs, e-invoicing does not need to be a heavy IT project. Most will be able to comply through plug-and-play cloud portals or accounting software plugins.

Step 1 — Assessment Process
We’ll look at where you’ve got gaps in your data, and where we might have to do to fix those

Step 2 — Select an Accredited Service Provider (ASP)
Once the ASP list is published, SMEs should focus on:

• Ease of use
  
• Cloud access
  
• XML conversion automation
  
• Error detection and alerts
  
• Simple onboarding

Step 3 — Issue Invoices Through the ASP Portal
Instead of building custom integrations, SMEs can:

• Create invoices directly in the ASP system

• Upload invoices generated elsewhere

• Rely on automated transmission to the FTA network

Step 4 — Train A Finance Owner
A single team member should monitor invoice status, rejections, and archiving.

Pro tip: Many ASPs are planning free invoice allowances for smaller businesses — making implementation low-cost and low-risk.

Implementation Pathway for Large Enterprises: A Structured Integration Project

For large organisations, e-invoicing implementation is closer to a finance-and-technology transformation programme. ERP integration alone may take 6–12 months, depending on system complexity.

Phase 1 — Assessment
Identify invoicing workflows, data gaps, VAT mappings, credit note handling, process gaps, people gaps and XML field availability.

Phase 2 — Solution Selection
Evaluate ASPs based on:

• Peppol experience
  
• Connector availability
  
• Data security
  
• Scalability
  
• Local Support capability

Phase 3 — Integration
Typical architecture options:

• Direct API integration
  
• Middleware connectors
  
• Hybrid cloud models

Master data accuracy will decide success.

Phase 4 — Testing
Run parallel scenarios:

• Invoice creation
  
• Validation
  
• Rejection handling
  
• Credit notes
  
• Amendments

Phase 5 — Go-Live
Implement by business unit or region before scaling.

Timeline guidance: Projects should begin in 2025 to allow safe margin for error.

How to Choose the Right ASP

Once the accreditation register is published, businesses will need to review:

• Approved provider status
  
• Connectivity with existing systems
  
• Cost-to-volume fit
  
• Training and onboarding
  
• Peppol experience
  
• UAE-specific support

This will be one of the most important decisions in the process.

Integration Tips for SAP, Oracle, Dynamics and Others

SAP users can use the native eDocument framework for XML creation and processing.

Oracle / NetSuite systems typically rely on middleware or third-party API connectors.

Dynamics / Zoho / SME platforms are likely to integrate through ASP plug-ins or cloud connectors.

Across all systems, three points matter most:
1️⃣ TRNs and VAT codes must be accurate
2️⃣ Credit note workflows must be mapped
3️⃣ Testing must start early

Training: The Most Overlooked Success Factor

Even the most advanced integrations will fail if people are not trained.
Teams need clarity on:
✔ How to generate invoices
✔ How to track status codes
✔ How to resolve rejections
✔ How to handle credit notes
✔ How to archive digital records

Key Takeaways

Start early — 2025 is the preparation year
Choose the pathway that fits your organisation
ASP selection will determine long-term success
Don’t underestimate ERP integration timelines
Train people before go-live, not after
E-invoicing is a strategic shift, not a formality

How Nishe Supports Businesses Through E-Invoicing

At Nishe, we work with organisations across the UAE and wider GCC to:

• Review system readiness
  
• Assess compliance gaps
  
• Support ASP selection
  
• Guide ERP integration
  
• Train finance teams
  
• Prepare data structures for your AP and AR workflows
  
• Manage testing and go-live

Whether you are a five-person SME or a multinational group, we can tailor support to match your scale and internal capabilities.

If your business is preparing — or unsure how to begin — our team is here to help.

Here’s a practical breakdown of the latest updates — and what they mean for businesses in real terms.

UAE Updates

1. FTA Decision No. 9 of 2025 – Refunds Can Be Declined During Audits

Effective: 1 January 2026

Under this decision, the FTA may withhold or decline VAT refunds where a taxpayer is under audit and certain risk conditions exist.

Refunds may be declined if:

• Significant tax risk is identified during the audit
• There are reasonable grounds to suspect tax evasion
• The refund relates to transactions linked to suspected evasion
• The taxpayer has overdue or outstanding tax returns 

Why this matters:
Refunds can no longer be treated as automatic. Businesses with weak documentation, unresolved filings, or audit exposure may face cash flow delays, even where a refund would otherwise be due.

2. FTA Decision No. 10 of 2025 – Sugar & Sweetener Calculation for Excise Tax

Effective: 1 January 2026

This decision introduces a clear mechanism for calculating sugar and sweetener content in concentrates, powders, gels, and extracts where no reliable guidelines exist.

Key points:

• Sugar content must be calculated based on the final prepared beverage
• Manufacturer instructions or an FTA-approved methodology must be used
• Supports accurate classification under the tiered sugar-based excise regime 

Why this matters:
This reduces ambiguity, strengthens consistency, and lowers the risk of disputes — but it also raises the bar for data accuracy and product classification.

3. FTA Decision No. 11 of 2025 – Additional Excise Tax Deduction Cases

Effective: 1 January 2026

This decision expands scenarios where previously paid excise tax may be deducted, while introducing tighter controls and documentation requirements.

Why this matters:
There are now clearer recovery opportunities — but only for businesses with robust records, traceability, and compliance processes.

4. VAT Administrative Exceptions Guide (VATGEX1)

The updated guide explains when the FTA may grant administrative relief from standard VAT obligations, such as:

• Registration or deregistration
• Filing deadlines
• Payment timelines
• Record-keeping requirements 

Exceptions are discretionary and must be formally requested with supporting evidence.

Why this matters:
This provides flexibility for genuinely exceptional cases — but it is not a workaround for poor compliance or late action.

5. Advance Pricing Agreements (APAs) – Corporate Tax Guide CTGAPA1

The new APA guide explains how businesses can agree transfer pricing methodologies in advance with the FTA.

Key benefits:

• Certainty on related-party pricing
• Reduced audit and adjustment risk
• Lower exposure to penalties 

Why this matters:
For groups with cross-border or related-party transactions, APAs are becoming a strategic risk-management tool, not just a technical option.

Bahrain Updates

1. Domestic Minimum Top-Up Tax (DMTT) Guide v1.2

Bahrain continues alignment with the OECD Pillar Two framework, introducing a 15% effective minimum tax for large multinational groups.

The updated guide clarifies:

• Scope and qualifying entities
• Registration responsibilities
• Safe harbours and transitional relief

2. VAT Deregistration Manual v2.0

The revised manual provides clearer guidance on:

• Voluntary vs mandatory deregistration
• Required documentation
• Procedural steps and timelines 

Why this matters:
Exiting VAT incorrectly can trigger penalties — this update reduces errors but increases expectations of accuracy.

Final Thoughts

Across the GCC, tax systems are becoming more precise, more digital, and more enforceable. Flexibility still exists — but only for businesses that act early, document properly, and engage proactively.

At Nishe, we help businesses interpret these updates, assess risk, and implement practical compliance strategies — without unnecessary disruption.

Here’s your November roundup, curated by the team at Nishe.

UAE UPDATES

1. FTA Releases New Guide for Reactivating Deactivated Corporate Tax TRNs

The Federal Tax Authority has issued a new user manual explaining how businesses can reactivate Corporate Tax TRNs that were previously deactivated or deregistered.

This applies when a business:

• Resumes operations
  
• Becomes subject to Corporate Tax again
  
• Had previously cancelled or suspended its TRN

The guide outlines step-by-step procedures, documentation, and timelines businesses must follow to ensure a compliant reactivation.

FTA Guide

2. Updated Administrative Penalties Framework (as amended to 2025)

Under Cabinet Decision No. 129 of 2025, the UAE has issued an updated and consolidated penalty regime covering:

1. General Tax Procedures
   
2. Excise Tax
   
3. VAT

The updated framework modernises the penalty system by:

• Introducing revised penalty amounts
  
• Updating definitions
  
• Creating a more proportionate and consistent compliance approach
  

Businesses should review the revised tables carefully to ensure they remain fully compliant.

Cabinet Decision (Consolidated Penalties)
 

3. Updated UAE Excise Tax Law — Federal Decree-Law No. 7 of 2017 (Amended)

The Ministry of Finance has published the latest amendments to the Excise Tax Law, including:

• Revised calculation methods
  
• Stricter pre-registration requirements
  
• Enhanced controls for Designated Zones & Warehouse Keepers
  
• New deductible and refundable tax clarifications
  
• Extended audit timelines (up to 15 years for evasion or failure to register)
  
• Higher tax rates — up to 200% of excise price or AED 100/unit

The message is clear: excise tax oversight is getting stricter, and compliance needs to be stronger.

Excise Law Updates

4. Cabinet Decision No. 106 of 2025 — New E-Invoicing Penalties

With e-invoicing deadlines approaching, the UAE has now issued penalties for non-compliance.

Key penalties include:

• Failure to implement e-invoicing / appoint ASP: AED 5,000 per month
  
• Not issuing/transmitting e-invoices: AED 100 per invoice (capped at AED 5,000/month)
  
• Not issuing/transmitting credit notes: AED 100 per note (capped at AED 5,000/month)
  
• Failure to report system failure: AED 1,000 per day
  
• Failure to update ASP on registered data changes: AED 1,000 per day

The penalties become effective upon publication and signal the authority’s intention to enforce e-invoicing rigorously.

E-Invoicing Penalties

BAHRAIN UPDATE

1. Bahrain NBR Updates VAT Real Estate Guide (Version 1.5)

Bahrain has issued updates to its VAT Real Estate Guide, with new clarifications for Owners’ Associations (OAs).

Key takeaways:

• Core OA activities (maintenance, common area services, legal representation) are non-economic → not subject to VAT.
  
• Revenue-generating or commercial activities may require VAT registration.
  
• Helps OAs understand when VAT applies — especially in mixed-use and large residential developments.

Bahrain Real Estate VAT Guide

Final Thoughts

As governments continue to modernise tax frameworks and enforce digital compliance, the businesses that act early — not late — will be the ones that stay ahead.

At Nishe, we help organisations across the GCC prepare for these changes with clarity, structure, and practical implementation support.

If you need help assessing your readiness or navigating any of these updates, our team is here to support you.

At Nishe, we’ve summarised the most important updates your business needs to know this month — and what they mean in practice.

UAE: Dubai Opens Mainland Market Access for Free-Zone Companies

Resolution: Executive Council Resolution No. 11 of 2025

Dubai has introduced a landmark reform allowing free-zone companies to conduct business on the mainland — a move that could reshape corporate structures and market strategies.

Key Highlights:

• Free-zone entities can now operate outside their zones, provided they obtain the relevant licence or permit from the Dubai Department of Economy and Tourism (DET). 
• The rule excludes financial institutions licensed in the DIFC. 
• Companies must maintain separate financial records for mainland and free-zone activities. 
• DET and free-zone authorities will soon publish a list of eligible activities. 
• Existing entities have one year (extendable by another year) to regularise their operations. 

Why it matters:
This reform bridges the long-standing divide between mainland and free-zone business activities, allowing companies to scale more flexibly and operate with fewer structural barriers. However, compliance — particularly around accounting segregation — will be critical.

Oman: E-Invoicing Goes Live from August 2026

Oman joins the UAE and Saudi Arabia in adopting mandatory e-invoicing, marking another step toward digital tax administration across the GCC.

Implementation Timeline:

1. Publication of technical specifications (Nov 2025) – OTA to release XML/PEPPOL data standards
2. Accreditation of ASPs (Dec 2025 – Feb 2026) – Registration and testing for authorised providers
3. Go-Live Phase 1 (Aug 2026) – Top ~100 taxpayers mandated to issue e-invoices
4. Wider rollout (2027) – Onboarding by industry and turnover
5. Full implementation (By Aug 2028) – All B2B and G2B transactions covered

Key Features:

• Based on the PEPPOL 5-corner model (no pre-clearance). 
• Enables real-time invoice exchange between buyers and sellers. 
• Fully integrated with ERP/accounting systems. 
• Mandates secure digital archiving and audit trail functionality. 

Why it matters:
Oman’s e-invoicing system will transform financial reporting for taxpayers, particularly for large and mid-sized companies. Early preparation is essential to align systems, select an accredited service provider, and ensure compliance by the 2026 deadline.

Qatar: New Requirement for Withholding Tax (WHT) Returns

Taxpayers in Qatar filing WHT returns via Dhareeba must now include a Contract Declaration Reference Number before submission.

Key Takeaways:

• If the related contract has not been declared, WHT submission cannot proceed. 
• The contract reference number must appear in the “Transactions” section in Dhareeba. 
• Businesses should declare contracts early to avoid delays. 

Why it matters:
This change strengthens the link between contract declarations and WHT payments, reinforcing transparency in corporate tax compliance. Businesses should review their internal processes to ensure all contracts are logged before the filing window.

The Takeaway

From e-invoicing mandates to expanded business permissions, the GCC continues to harmonise and digitise its tax systems. The message is clear: compliance is becoming more integrated, more transparent, and more digital.

At Nishe, we help businesses navigate these transitions, from readiness assessments to system implementation,

 ensuring compliance without disruption.

“It’s just another compliance form — how hard can it be?”

The truth?
It’s not hard, but it’s different — and that’s where most businesses slip up.

Below are the five most common pitfalls we see across UAE businesses — and how you can avoid them.

1. Treating Corporate Tax as a once-a-year task

Corporate Tax isn’t something you can fix at filing time.
It affects your structure, contracts, and daily accounting decisions throughout the year.

We’ve seen companies wait until audit season to “get their numbers ready,” only to discover:

• Related-party transactions weren’t documented properly 
• Adjustments weren’t tracked 
• Taxable income wasn’t calculated the way the FTA requires 

By then, it’s too late to optimise — or worse, you’re left explaining inconsistencies.

The fix:
Make Corporate Tax part of your monthly and quarterly reviews, not just year-end.
That means aligning your chart of accounts, documentation, and decision-making now — not later.

2. Assuming Free Zone = Zero Tax

This is one of the biggest misconceptions in the UAE.
Being based in a Free Zone doesn’t automatically mean you’re exempt.

To qualify for the 0% Free Zone rate, you need to meet strict conditions:

• Generate qualifying income
• Maintain adequate substance (people, assets, activity in the UAE)
• Keep proper accounting segregation between qualifying and non-qualifying income
• Stay compliant with transfer pricing rules

We’ve seen businesses lose their 0% status simply for mixing qualifying and non-qualifying revenue in one ledger.

The fix:
Don’t rely on your trade licence alone — rely on eligibility checks and documentation.
If your income structure is unclear, Nishe can help you review and protect your Free Zone position.

3. Missing the details that matter

Corporate Tax isn’t about ticking boxes — it’s about understanding what the FTA expects from your data.

Simple oversights can trigger penalties:

• Incorrect or incomplete related-party disclosures
  
• Using group assumptions instead of UAE-specific rules
  
• Not reconciling book profits to taxable income correctly 

Most of these errors aren’t deliberate — they happen when finance teams reuse “global templates” without tailoring them for UAE-specific laws.

The fix:
Localise everything.
Your group reporting pack might look fine globally, but it won’t pass an FTA review unless it follows local guidance and Ministerial Decisions.

4. Ignoring Transfer Pricing (until it’s too late)

Transfer pricing isn’t just for large multinationals anymore.
Even small-to-mid-sized groups with intercompany transactions fall under these rules.

That includes:

• Management fees
  
• Shared services
  
• Loans or guarantees
  
• Cross-border supplies within the same group 

We’ve seen businesses fail to prepare proper Transfer Pricing documentation and Local Files, thinking “we’re too small.”
But the FTA expects transparency — and can request these documents at any time.

The fix:
Review your intercompany arrangements now.
Even a simple management charge between two entities should have a pricing policy, a supporting rationale, and a paper trail.

Nishe’s tax team helps businesses build compliant, practical transfer pricing documentation — without unnecessary complexity.

5. Waiting until the deadline to act

Many businesses are taking a “wait and see” approach.
But here’s the reality: the FTA has been clear about enforcement, and penalties are real.

Late filings, inaccurate declarations, or missing data can lead to:

• Monetary fines
  
• Increased audit scrutiny
  
• Suspension of Free Zone benefits

We’ve helped clients who nearly missed deadlines — and it’s a stressful scramble that’s completely avoidable.

The fix:
Start preparing early.
Corporate Tax touches your accounting, systems, and people — it’s not just a form to be filed.
Early planning means fewer surprises and more time to optimise.

The takeaway: Treat Corporate Tax as a business strategy, not a compliance chore

The UAE’s Corporate Tax regime is still new, but it’s here to stay — and those who plan early will gain a real edge.

At Nishe, we work with CFOs, founders, and finance leaders to make Corporate Tax compliance simple, structured, and strategic — so you can stay focused on running your business.

Get in touch with our team for a readiness review or corporate tax consultation.

UAE Updates

• FTA VATGIT1: Input Tax Apportionment Guide
  • Taxable persons in the UAE can apply to the FTA to use a specified recovery percentage based on the previous year’s calculated recovery rate, reducing the burden of recalculating the recovery ratio for every period.
  • Why it matters: If your business makes exempt supplies (like financial services or residential leases), you cannot claim VAT in full. Standard and special calculation methods apply, however, now you can request for a specified recovery rate. A significant development is new guidance on the Specified Recovery Percentage (SRP), effective 15 Nov 2024, allowing eligible businesses to use a fixed rate for input tax apportionment, simplifying compliance and reducing admin.
• Corporate Tax Clarifications
  • CTP009: Clarifies valuation rules for real estate developers under transitional provisions. Developers must elect the method in their first tax return, with elections applying per property/project.
  • CTP008: Clarifies how family wealth structures (foundations, trusts, SPVs, family offices) are treated for corporate tax. Some may be transparent, others fully taxable, depending on their structure and regulation.
• E-Invoicing Ministerial Decisions 243 & 244
  • Mandatory phased rollout of electronic invoicing for B2B and B2G transactions.
  • Large businesses (≥ AED 50m revenue): live by Jan 2027.
  • SMEs: live by July 2027.
  • Government entities: live by Oct 2027.
  • Businesses must appoint an Accredited Service Provider (ASP).
• FTA VAT Group Turnover Declaration
  • New declaration letter format required for VAT groups.

 Bahrain Updates

• VAT Registration Guide (v1.9): Enhanced instructions for portal registration, eligibility questionnaires, and VAT group rules.
• VAT Transportation Guide (v1.2): Clarifies what qualifies as “means of transport” for zero-rated or exempt VAT treatment.

KSA Update

• E-Invoicing – Wave 24: ZATCA announced criteria for taxpayers to integrate with Fatoora by June 30, 2026 (VAT revenues ≥ SAR 375,000 in 2022–2024).

Conclusion:
Across the GCC, tax authorities are tightening compliance, enforcing digitalisation, and phasing in e-invoicing. Whether it’s VAT recovery in the UAE, VAT registration in Bahrain, or e-invoicing in KSA, businesses must act early.

At Nishe, we help companies interpret these changes, implement the right systems, and stay ahead of deadlines. Talk to us today about your compliance roadmap.

At Nishe, we’ve guided clients through e-invoicing in Saudi Arabia, and now we’re helping businesses in the UAE prepare for a smooth transition. Here’s what you need to know.

1. What is changing?
   From July 2026, all invoices and credit notes must be issued, transmitted, and reported through the UAE’s new Electronic Invoicing System, based on international PEPPOL standards.

Instead of simple PDFs or paper, businesses will need to work with an Accredited Service Provider (ASP) to issue structured e-invoices that are automatically processed and shared with both the customer and the Federal Tax Authority (FTA).

2. Key dates and phases

• 1 July 2026: Pilot Programme launches (voluntary participation possible).

• 31 July 2026: Large businesses with revenue ≥ AED 50m must appoint an Accredited Service Provider.

• 1 Jan 2027: Mandatory go-live for businesses with revenue ≥ AED 50m.

• 31 Mar 2027: All other businesses below AED 50m revenue must appoint an Accredited Service Provider.

• 1 Jul 2027: Mandatory go-live for businesses below AED 50m revenue.

• 1 Oct 2027: Government entities must go live.

Note: B2C transactions are excluded for now, but may be brought in by later decision.

3. What businesses must do now
   Preparation is not optional. Delaying could mean rushed changes, system errors, or compliance risks. Every business should:

• Assess systems & data against the new e-invoicing data dictionary.

• Appoint an ASP early and map out ERP integration.

• Run a gap analysis of current invoicing processes.

• Prepare staff with training and change management.

4. Common pitfalls to avoid

• Treating e-invoicing as “just another PDF format.”

• Waiting until 2027 to start — leaving no time for testing.

• Ignoring reconciliation processes (credit notes will be mandatory for amendments).

• Failing to plan for data storage and reporting obligations.

5. How Nishe can help
   We’ve already supported businesses across Saudi Arabia, the UAE, and global markets with e-invoicing rollouts. Our team of compliance and finance transformation specialists will:

• Conduct a gap analysis of your systems and processes.

• Help you choose and integrate an Accredited Service Provider.

• Provide hands-on support from planning to go-live.

• Train your team to avoid costly mistakes.

Conclusion
The UAE’s e-invoicing system is more than a compliance requirement, it’s a shift toward smarter, digital finance operations. Businesses that act early will enjoy smoother workflows, faster payments, and fewer admin headaches.

Get in touch with Nishe today to prepare your business for e-invoicing 2026–2027.

If you’re a business owner or part of a finance team, this is the moment to start preparing. Based on lessons learned from Saudi Arabia and other global markets, early movers are the ones who stay compliant and unlock real business benefits.

So, what are the key compliance requirements you need to know?

1. Understanding the FTA’s Definitions

The VAT Law now introduces clear terms like:

• Electronic Invoice
• Electronic Tax Credit Note
• E-Invoicing System
  

Why this matters: Compliance starts with the right definitions. For example, sending a PDF by email is not considered e-invoicing. The FTA requires invoices in a structured format (e.g., XML or UBL) so that data is machine-readable and can be validated in real-time.

Action Point: Familiarise yourself with the FTA’s published definitions. They set the baseline for every compliance step ahead.

2. Issuing Invoices in a Structured Format

Under the UAE e-invoicing regime, invoices must:

• Be generated electronically (not scanned or paper-based).
• Be transmitted in a structured, machine-readable format.
• Contain all mandatory data fields as per the FTA’s Data Dictionary (still under consultation). 

Action Point: Review whether your current ERP or accounting system can generate structured invoices. If not, you’ll need upgrades or an accredited service provider.

3. Integration with the FTA System

The UAE has chosen the Peppol 5-corner model for e-invoicing, meaning that every invoice must pass through an accredited service provider (ASP) before being transmitted to customers and the FTA.

Action Point: Businesses must select and onboard an ASP accredited by the Ministry of Finance. Once live, invoices will flow directly from your system → ASP → FTA → customer.

4. Adjusting Internal Processes

E-invoicing isn’t only about technology. It changes how your teams work.

• Finance teams must adapt approval workflows.
• Sales teams must understand how invoices are shared with customers.
• Audit trails need to be maintained in line with FTA requirements. 

Action Point: Begin staff training early. The transition will be smoother if your people are ready when the system goes live.

5. Record-Keeping and Archiving

The FTA requires invoices to be securely archived for audit purposes. Under the e-invoicing framework, this will likely mean digital storage with strong data integrity standards.

Action Point: Confirm your archiving process complies with UAE tax law requirements — including 7-year record retention for VAT-related documents.

6. Timelines and Penalties

The pilot phase for UAE e-invoicing is expected to begin in December 2025, with Phase One rolling out in July 2026. Businesses that delay may face penalties for non-compliance, as seen in Saudi Arabia, where fines and operational disruptions hit late adopters.

Action Point: Don’t wait for final dates. Start your readiness assessment now.

7. Beyond Compliance: The Benefits

While e-invoicing is mandatory, it’s not just about avoiding penalties. The benefits are significant:

• Faster payment cycles
• Lower risk of fraud and error
• Easier VAT reconciliation
• Stronger data security
• Cost savings over time 

Action Point: Use the e-invoicing transition as a chance to modernise your finance function.

Lessons from Saudi Arabia and Global Markets

In Saudi Arabia, businesses that started preparing 6–12 months before the mandate went live avoided last-minute system chaos and built efficiency gains. Across Europe and Latin America, e-invoicing has become the norm — improving tax compliance and reducing costs.

The message is clear: prepare early, and you’ll be better placed to capture the upside.

Final Thoughts

The UAE’s move to e-invoicing is not just another compliance box to tick — it’s a shift that will change how every business operates. For SMEs and finance teams, this is the time to:

• Assess your invoicing process
• Confirm system readiness
• Train your people
• Select the right accredited provider 

At Nishe, we’re already guiding businesses through readiness assessments and system transitions. Our experience in Saudi Arabia and across the GCC gives us a clear view of what works and what pitfalls to avoid.

Need help with e-invoicing compliance in the UAE?
Get in touch with the Nishe team today.