New VAT Regulation Amendments (Cabinet Decision No. 149 of 2026)
- Issued on 8 September 2026, introducing changes to the Executive Regulation of Federal Decree-Law No. 8 of 2017 on VAT. These amendments may involve changes to registration thresholds, supporting documentation, deduction rules, or invoicing formats. Businesses must review the new regulation text in the official publication to identify which specific clauses affect their operations. (mof.gov.ae)
e-Invoicing System Updates
- Under Ministerial Resolutions No. 66 of 2026 and No. 56 of 2026, several changes were made to the implementation of the e-invoicing system, including: amended eligibility criteria, changes in accreditation procedures for service providers, and adjustments in certain provisions of implementation. (mof.gov.ae)
- Businesses will need to use Accredited Service Providers (ASPs) and adhere to new mandatory fields and validation rules in e-invoices. Non-compliance can lead to administrative penalties. (mof.gov.ae)
Excise Tax & Minimum Pricing Compliance
- As of 1 September 2026, UAE law mandates a minimum excise price of AED 1 per mL for liquids used in electronic smoking devices. Businesses importing, distributing, or selling such liquids must calculate excise costs accordingly. Failure to apply minimum price could lead to enforcement, loss of tax credits, or fines. (mof.gov.ae)
Consequences of Non-Compliance
- VAT compliance failures: missing deadlines, wrong format invoices → potential fines, late payment penalties, or deregistration.
- e-Invoicing non-conformity: incorrect structured data, non-use of ASPs → risk of penalties under Ministerial Regulation. (mof.gov.ae)
- For corporate taxpayers, missing Pillar Two filings may expose them to additional top-up tax or loss of international treaty relief if their global tax liabilities fall below thresholds. (mof.gov.ae)
How to Prepare & Action Plan
| Task | Who Should Act | By When | Key Steps |
|---|---|---|---|
| Review VAT Executive Regulation changes | All VAT-registered businesses | Upon publication of detailed guidance (soon after 8 Sept) | Map your VAT inputs/outputs; adjust internal policies/invoice templates |
| Audit e-invoicing readiness | Accounts/IT teams | Immediately | Ensure your ASP provider is accredited; test invoice format, field validation |
| Excise pricing validation | Importers/distributors in tobacco/e-liquids sectors | Ahead of 1 Sept 2026 | Inventory analysis; pricing model updates; adjust contracts with suppliers |
| Pillar Two readiness | Multinationals / entities with cross-border structures | For FY starting 1 Jan 2025 or later | Identify constituent entities, prepare data for returns; appoint designated local filer |
By proactively aligning with regulatory changes—not just reacting—you can avoid penalties, improve cash flow certainty, and maintain reputation in increasingly regulated Gulf tax landscapes.