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February 04, 2026

UAE & Bahrain Tax Updates, What Businesses Need to Know (January 2026)

The start of 2026 has brought a wave of practical updates from the Federal Tax Authority (FTA) and Bahrain’s National Bureau for Revenue (NBR).

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.

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