Three tax changes are working through the system this year. One affects your shopping, two affect anyone running a business here.
Sugary drinks: the levy changed shape
From 1 January 2026 the way tax is applied to sugary drinks changed. The practical effect for households is that the price gap between high-sugar and low-sugar products widens — the levy tracks sugar content more closely than before, rather than applying uniformly to a category.
Not a large sum on any single purchase, but it’s the kind of change that shows up quietly in a monthly grocery bill.
E-invoicing: phased rollout from mid-2026
The UAE is implementing a nationwide e-invoicing system in phases starting mid-2026. If you run a business here, this eventually changes how you issue and store invoices — it isn’t optional, and phased rollouts have a habit of arriving for smaller businesses with less notice than larger ones got.
Worth asking your accountant now which phase you fall into, rather than finding out from a deadline.
Refunds now have a five-year limit
Amendments to the existing law introduce a five-year time limit for submitting requests to reclaim excess refundable tax after reconciliation. There’s also a change removing the need to issue self-invoices when applying the reverse charge mechanism.
Alongside these, the Federal Tax Authority’s audit and investigation powers have been expanded. The stated intent is fewer disputes and faster resolutions — but expanded audit powers cut both ways, and clean records matter more than they did.
If you run a business here
None of this changes the headline corporate tax position: 9% on profits above AED 375,000, with the first AED 375,000 at 0%. That means the effective rate is always below 9% — around 2.3% at AED 500,000 profit and 5.6% at a million. The full breakdown is in our Business Setup guide.
Published 19 August 2026. This is general information, not tax advice. Tax rules are detailed, activity-specific and subject to revision — confirm your own position with the Federal Tax Authority or a licensed tax adviser before acting.
Related
- Business Setup — free zone vs mainland, and the corporate tax reckoner
- Money Saving Guide — where household costs actually go
- UAE Updates — every rule change we track, with dates
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