UAE FTA Tax Updates 2026 – VAT & Corporate Tax Compliance Guide

The UAE Federal Tax Authority (FTA) has issued major VAT and Corporate Tax updates effective 2026. These changes signal a strong shift from tax awareness to strict enforcement and impact all UAE businesses.

Latest VAT Updates in UAE

Reverse Charge on Scrap Metal (Effective 14 January 2026)

• VAT will not be charged by the supplier on local scrap metal supplies
• VAT-registered buyer must account for VAT under Reverse Charge
• Applicable when scrap is purchased for resale or processing
• Relevant for trading, recycling and manufacturing businesses

VAT Law Amendments Effective 1 January 2026

• Removal of mandatory self-invoicing in certain reverse charge scenarios
• Time limits introduced for claiming VAT refunds and excess input tax
• FTA empowered to deny input VAT recovery in cases of abuse or evasion
• Strengthening of audit and enforcement provisions

Increased Focus on VAT Documentation

• Valid tax invoices are mandatory
• Agreements and contracts must be properly maintained
• Clear payment evidence is required for VAT recovery

VAT Audits Intensifying in UAE

• Cross-checking of VAT returns with Corporate Tax data
• Focus on large VAT refunds and related-party transactions
• Misuse of zero-rating and exemptions under scrutiny

Corporate Tax Compliance in UAE

Corporate Tax Registration is Mandatory

• Applicable even if profit is below AED 375,000
• Applies to dormant businesses and free zone entities
• Late registration penalties may apply

Corporate Tax Return Filing Deadlines

• Return must be filed within 9 months from financial year end
• Tax payable must be settled on or before the due date

Transfer Pricing and Connected Persons

• Transactions must be conducted at arm’s length
• Management fees, salaries and intercompany charges are scrutinized

FTA Risk-Based Audits 2025–2026

• VAT, Corporate Tax, ESR and financial statements are cross-checked
• Increased audit notices expected

What Businesses Should Do Now

• Review VAT treatment of all supplies
• Apply Reverse Charge correctly
• Reconcile VAT and Corporate Tax figures
• Maintain strong documentation
• File returns on time to avoid penalties

VAT & Corporate Tax Advisory – SA Consultants

SA Consultants assists businesses with VAT and Corporate Tax compliance, registrations, filings, audits and penalty mitigation.

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