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September 01, 2026

UAE Tax & Regulatory Updates: August 2026

Seven regulatory developments. Multiple deadlines. Here’s what matters, who it affects, and what to do next.

August 2026 arrived with a cluster of regulatory changes that affect a wide range of UAE businesses, from multinationals managing Top-up Tax obligations to small businesses claiming relief, and from tobacco importers to every VAT-registered business in the country.

None of these are distant future concerns. Several are live this month or within weeks. Here’s the breakdown.

  1. Excise Tax Minimum Prices for Tobacco and E-Smoking Products, Live from 1 September 2026

Cabinet Decision No. 137 of 2026 introduces minimum excise prices for tobacco and electronic smoking products, effective today.

The minimum prices:

Cigarettes: AED 0.40 per cigarette. Water pipe tobacco, ready-to-use tobacco, and similar products: AED 0.10 per gram. Liquids used in electronic smoking devices, whether or not they contain nicotine: AED 1 per millilitre.

The previous Cabinet Decision No. 55 of 2019 on excise prices for tobacco products is repealed. The excise price will otherwise continue to be determined under the methodology in Cabinet Decision No. 197 of 2025, subject to these new minimum floor prices.

What this means in practice: The minimum price acts as a floor. Where the calculated excise price under the standard methodology falls below these minimums, the minimum price applies instead. Businesses in the tobacco supply chain- importers, distributors, and retailers- need to review their current excise calculations and pricing structures against these floors immediately.

What to do: If your business handles any of these product categories, review your excise tax calculations and pricing as a matter of urgency. This is live from today.

  1. Updated Record-Keeping Requirements, FTA Decision No. 4 of 2026 (Effective 30 July 2026)

The FTA issued Decision No. 4 of 2026 in June, with effect from 30 July 2026. This updates the rules for maintaining and preserving accounting records and commercial books for tax compliance purposes, and the requirements are more specific than the previous framework.

What’s required:

Records must be complete and identical to the originals. Electronic copies and photocopies are permitted, but must include all pages in the original order and be of sufficient quality to be clearly legible.

Partial scanning is explicitly prohibited. You cannot scan only the pages you think matter; the full document must be retained.

The FTA must be granted access to all records on request, including passwords and encryption keys for electronic systems. If you use a third party to maintain your records, you remain legally responsible for compliance and record safety. The decision of convenience doesn’t transfer the legal obligation.

Why this is more significant than it sounds:

Most businesses assume their record-keeping is adequate. The specific prohibition on partial scanning, and the explicit requirement for original-order retention, will catch businesses that have been scanning selected pages, compressing documents, or keeping only summary records. An FTA audit request that can’t be satisfied because records are incomplete or partially retained is a material compliance failure.

What to do: Review your current record-keeping and document management processes against these requirements. If you use a third-party accounting or document management provider, confirm in writing that their practices comply with this Decision.

  1. Top-up Tax Registration, FTA Decision No. 12 of 2026 (Key Deadline: 30 November 2026)

FTA Decision No. 12 of 2026, issued 16 July 2026 and effective for fiscal years starting on or after 1 January 2025, establishes the registration and deregistration timelines for entities subject to the Qualified Domestic Minimum Top-up Tax.

This applies to multinational enterprise groups operating in the UAE with annual consolidated revenues of EUR 750 million or more.

Registration timeline:

Entities in scope must register with the FTA within 7 months after the end of their first fiscal year in scope. For entities with a fiscal year ending before 30 April 2026, registration must be completed by 30 November 2026. That deadline is 13 weeks away.

Deregistration timeline:

Entities must apply for deregistration within 6 months of ceasing to exist or leaving an MNE group. Entities that ceased to exist before 30 June 2026 must deregister by 31 December 2026. Deregistration is only possible after all Top-up Tax liabilities and returns are settled. The FTA retains the discretion to deregister entities at its own initiative if the requirements are met but no application has been submitted.

Out-of-scope notifications:

Where an entity or group falls out of scope, a notification must be submitted within 6 months from the end of the relevant fiscal year. That notification remains valid for up to 5 years. If the entity comes back into scope, an in-scope notification is required within 7 months. After 5 consecutive years out of scope, deregistration is required within 6 months, unless the entity re-enters scope.

Designated Filing Entities:

Where a Domestic Designated Filing Entity is appointed, it is responsible for all registrations, deregistrations, and notifications on behalf of the group members.

What to do: MNE groups with UAE operations should review their group structure and fiscal year-end dates immediately. The November 30 registration deadline for entities with early fiscal year-ends is approaching fast. If a Designated Filing Entity is in place, confirm it has the necessary information to meet the registration requirements on behalf of all group members.

  1. Top-up Tax Guides, Excluded Entities and Scope & Registration

The FTA has issued two new Top-up Tax guides alongside the registration decision:

TTGEIE1, Excluded Entities and Investment Entities
 This guide covers the definition of Excluded Entities under the DMTT legislation, the election not to treat certain entities as excluded, the definition of Investment Entities, and the practical implications of each status. Not all entities within an MNE group are automatically in scope, understanding the excluded entity categories is an important first step before completing the registration assessment.

TTGREG1, Scope and Registration
This guide explains the conditions that bring an MNE group within scope of the DMTT legislation, the types of entities that are and are not subject to Top-up Tax, and the full registration process and timelines.

What to do: If your business is part of an MNE group with UAE operations, both guides should be reviewed as part of your registration assessment. The excluded entity determination in particular should be documented, it is not a position you want to arrive at informally.

  1. FTA Decision No. 13 of 2026, Supplier Verification Before Input VAT Deduction (Effective 1 October 2026)

We have covered this in detail in a dedicated post, but given the October 1 effective date and the significance of the change, it warrants including here.

FTA Decision No. 13 of 2026 requires all UAE VAT-registered businesses to complete specific verification checks on suppliers and individual supplies before deducting input VAT. It applies from 1 October 2026 with no sector exceptions.

The three thresholds:

Supplies under AED 10,000 (VAT-exclusive), generally exempt, unless total annual spend with that supplier exceeds AED 100,000.

Suppliers above AED 100,000 annually, full verification required: identity, place of business, and risk indicators. The AED 10,000 exemption disappears for that supplier entirely.

Suppliers above AED 375,000 annually, all of the above, plus a written UAE bank confirmation and a documented review of publicly available information about the supplier.

The one document every business must have by 1 October:

A written policy, required under Article 5(4) of the Decision, naming who implements, reviews, and supervises the verification procedures. It doesn’t get filed with the FTA, but it must exist and be maintained with your tax records.

What to do: Run a rolling 12-month purchase report by supplier this week. The look-back on 1 October already reaches October 2025. Identify your AED 100,000 and AED 375,000 suppliers. Build the verification files. Write the policy. Four weeks is not much time.

  1. Procedures for Seized and Abandoned Goods, FTA Decision No. 7 of 2026

FTA Decision No. 7 of 2026, effective 30 July 2026, establishes formal procedures for the storage, sale, and revenue allocation of seized or abandoned goods, particularly those that are perishable, subject to leakage, or may endanger other goods or facilities.

The key practical points: seized goods may be sold by public auction if perishable, dangerous, or unclaimed after outstanding liabilities are settled. Sales require a committee decision and, where goods are under investigation, approval from the relevant legal authorities. Auction proceeds are applied first to auction and storage costs, then to outstanding taxes and penalties, with any remainder either credited to the owner’s tax account or transferred to FTA revenues where rights are waived.

Who this matters for: Businesses operating in import, distribution, or excisable goods categories where seizure risk is a genuine operational possibility. For most businesses this is background information, but for those in the relevant sectors, understanding the procedure before it applies to you is better than encountering it for the first time under pressure.

  1. VAT on Concerned Goods, Public Clarification VATP045

The FTA has issued Public Clarification VATP045, addressing the VAT treatment of “Concerned Goods” imported into the UAE on or before 31 December 2025.

A VAT-registered business importing Concerned Goods is required to account for output tax and issue a self-billed tax invoice in respect of the import, unless they obtained an administrative exception from the FTA. Input tax can be recovered to the extent the goods were acquired to make taxable supplies, provided the business is VAT-registered and retains the supporting documents: the supplier’s invoice and a declaration from the relevant Emirate Customs Department.

What to do: If your business imported Concerned Goods before 1 January 2026 and hasn’t reviewed its output tax accounting and self-billing obligations under this clarification, do so now. Input tax recovery depends on having the right documentation in place, retroactively assembling it is significantly harder than maintaining it at the time.

  1. Small Business Relief Extended to 31 December 2029

The good news in this round: Ministerial Decision No. 131 of 2026 officially extends Small Business Relief to 31 December 2029.

Eligible resident businesses with gross revenue of AED 3 million or less continue to benefit from 0% Corporate Tax and are exempt from transfer pricing documentation requirements for the relief period.

This is a meaningful extension, three more years of significantly simplified Corporate Tax compliance for qualifying businesses.

The important details to remember:

SBR must be actively elected in your Corporate Tax return. It is not applied automatically. Businesses that are part of a multinational group or UAE large business group do not qualify regardless of revenue. And electing SBR means you are treated as having no taxable income for that period, which simplifies compliance but also has implications for how certain elections and loss carry-forward rules apply.

What to do: If your business has revenue below AED 3 million and you haven’t yet assessed whether you qualify, this extension makes that assessment worth doing now. If you’ve been electing SBR without formally reviewing the eligibility conditions each year, it’s worth confirming that your position remains correct.

Key Actions & Upcoming Deadlines

Immediate, live from 1 September:
 Excise tax minimum prices, review calculations and pricing for tobacco and e-smoking products.

Already in effect, review now:
 Record-keeping requirements, review document management practices against FTA Decision No. 4 of 2026.
 Concerned Goods VAT, review output tax accounting and documentation for pre-2026 imports.

Before 1 October:
 Supplier verification, run your purchase report, build supplier files, write the Article 5(4) policy.

Before 30 November:
 Top-up Tax registration, MNE groups with fiscal years ending before 30 April 2026 must register.

Before 31 December:
 Top-up Tax deregistration, entities that ceased to exist before 30 June 2026.

Ongoing:
 Small Business Relief, confirm eligibility and elect correctly in your CT return.

How Nishe Can Help

These updates span excise tax, VAT, Corporate Tax, Top-up Tax, and record-keeping obligations. If any of them raises a question about your specific position, or if your Q4 compliance calendar is starting to feel overwhelming, we’re here to help.

No lengthy engagement before we’ve understood your situation. Just a practical conversation about where you are and what you need.

Get in touch with the Nishe team

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