TL;DR — the key facts
What you need to know
MD 243 & 244 of 2025 set the Peppol 5-corner (DCTCE) model. Voluntary pilot from 1 July 2026. Mandatory for large taxpayers (AED 50M+) from 1 January 2027. All VAT-registered SMEs from 1 July 2027.
0% on the first AED 375,000 of taxable income, 9% above that. Small Business Relief (SBR) lets revenue ≤ AED 3M be treated as zero taxable income — but only for tax periods ending on or before 31 December 2026.
5% rate unchanged, but 2026 rewrites the procedural rules. Mandatory registration at AED 375,000; voluntary at AED 187,500. Quarterly returns due 28 days after period end. Reverse charge self-invoicing removed from 1 Jan 2026.
Timeline
1 January 2026
New Tax Procedures Law live (FDL 17/2025); reverse charge self-invoicing removed.
14 April 2026
Cabinet Decision 129/2025 — rewritten VAT & Corporate Tax penalty schedule takes effect.
1 July 2026
UAE e-invoicing voluntary pilot opens (Peppol PINT AE via Accredited Service Provider).
31 December 2026
Last tax period eligible for Small Business Relief. After this, SBR disappears.
1 January 2027
E-invoicing mandatory for large taxpayers (annual revenue ≥ AED 50M).
1 July 2027
E-invoicing mandatory for all remaining in-scope businesses, including VAT-registered SMEs.
VAT and invoicing compliance
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Four major changes converge in 2026: (1) the new Tax Procedures Law under FDL 17/2025 live from 1 January; (2) the rewritten penalty regime under Cabinet Decision 129/2025 effective 14 April 2026; (3) the opening of the Peppol-based e-invoicing voluntary pilot on 1 July 2026; and (4) the final eligibility window for Small Business Relief, which expires for tax periods ending after 31 December 2026.
Yes. Every UAE taxable person must register with the FTA for Corporate Tax, regardless of income level or SBR election. Failure to register on time triggers an AED 10,000 penalty.
Under MD 244 of 2025, mandatory compliance for VAT-registered SMEs is 1 July 2027. Large taxpayers (AED 50M+) go first on 1 January 2027. Voluntary pilot opens 1 July 2026.
Mandatory registration when taxable turnover over the past 12 months exceeds AED 375,000 or is expected to exceed AED 375,000 in the next 30 days. Voluntary registration available at AED 187,500.
SBR lets a UAE-resident taxable person with revenue ≤ AED 3 million elect to be treated as having no taxable income — effective 0% corporate tax. Available only for tax periods ending on or before 31 December 2026.
