FTA Updates: New UAE VAT Regulations Every Business Should Know

The Federal Tax Authority (FTA) has been active in 2025–2026, updating guidance, clarifying requirements, and preparing for the e-invoicing mandate. Here are the regulatory updates that UAE VAT-registered businesses most need to know about.

E-invoicing mandate — what the FTA has confirmed

The FTA has confirmed that UAE e-invoicing will follow a decentralised 5-corner PEPPOL model with PINT AE specifications. The target date is 1 July 2026 for B2B and B2G transactions. Service Providers must be accredited by the Ministry of Finance.

Key fields under PINT AE include: supplier and customer details with TRN, unique invoice number, ISO-formatted date, currency, line items with VAT code and rate, and totals that reconcile to within rounding tolerance. The human-readable view must carry bilingual EN/AR labels.

Input tax recovery — updated guidance

The FTA has clarified that input tax recovery requires a valid tax invoice from a registered supplier. If the supplier's VAT registration is cancelled or suspended at the time of supply, the input tax claim may be disallowed. Finance teams should run supplier VAT status checks periodically.

VAT return filing — quarterly vs. monthly

Standard return period is quarterly. Businesses with VAT payable above AED 150 million in the preceding 12 months must file monthly. The FTA has been clear that late filing attracts penalties: AED 500 for the first late filing, AED 1,000 for the second, and daily penalties for continued non-compliance.

Zero-rated supplies — healthcare and education

The FTA has maintained the zero-rate for healthcare and education services. Businesses in these sectors should confirm their supplies qualify and maintain supporting documentation — the FTA has increased scrutiny on healthcare exemptions.