During the month of May 2026, the Federal Tax Authority (FTA) heavily promoted its ongoing late registration relief initiative. The waiver allows eligible businesses to obtain relief from the AED 10,000 late registration penalty provided certain filing requirements are met within prescribed timelines.
Taxpayers are strongly urged to regularize their positions before the window narrows to avoid the default AED 10,000 administrative fine.
With the initial corporate tax cycles maturing, businesses are preparing for enhanced scrutiny from the Federal Tax Authority (FTA). Key focus areas include:
Reconciliation between VAT returns and Corporate Tax filings.
Meticulous documentation of Transfer Pricing (TP) policies and benchmarking.
Ensuring clear reconciliations for items like Right-of-Use (ROU) asset depreciation under IFRS 16 and timing differences in employee bonus provisions.
Establishing clear trails for tax-loss carry-forwards.
Qualifying Free Zone Person (QFZP) eligibility and supporting documentation.
In May 2026, the market has clearly shifted from registration and filing towards audit preparedness. Businesses should ensure that Corporate Tax positions, transfer pricing documentation, and reconciliations are fully supported and readily available for potential FTA review.
The UAE DMTT applies to multinational enterprise (MNE) groups with consolidated revenues of at least EUR 750 million in at least two of the preceding four financial years. Considering the first DMTT year already underway, taxpayers have increased focus on Pillar Two readiness. Businesses are focusing on Pillar Two impact assessments, Effective Tax Rate (ETR) calculations and assessment of Free Zone structure and incentive.
“Stay compliant, stay competitive, act fast”
– VINAY VENKAT
The UAE has issued Ministerial Decision No. 56 of 2026, introducing material revisions to the country’s e-invoicing implementation roadmap. These amendments reflect a phased approach designed to accommodate businesses of varying scales while establishing a robust digital tax infrastructure aligned with international standards.
The framework establishes two distinct phases.
Phase 1 encompasses large enterprises with annual consolidated revenues exceeding AED 50 million, requiring Application Service Provider (ASP) appointment by October 30, 2026, a strategic three-month extension from the previously announced deadline of July 31, 2026. Mandatory e-invoicing implementation for this cohort commences January 1, 2027.
Phase 2 extends the mandate to smaller businesses with annual revenues below AED 50 million, with ASP appointment required by March 31, 2027, and full implementation mandated by July 1, 2027.
The UAE’s e-invoicing architecture operates through the PINT-AE standard, a localized adaptation of the Peppol International specification requiring all invoices to be exchanged in structured XML format via accredited service providers.
Organizations must conduct detailed ERP system assessments to confirm PINT-AE compatibility, meticulously align invoice data structures with specifications, and plan integration with the Peppol network infrastructure through accredited service providers.
Phase 1 entities face a compressed preparation window and should commence ERP readiness assessments and ASP vendor selection immediately. Early adoption of PINT-AE compliance frameworks will position organizations favorably for audit readiness while reducing operational disruption during the transition to digital invoicing a cornerstone of the UAE’s broader tax administration modernization initiative.
The Zakat, Tax and Customs Authority (ZATCA) introduced updated pathways and clarifications regarding Advanced Pricing Arrangements (APAs). This provides MNE groups with a structured mechanism to proactively agree on transfer pricing methodologies for cross-border transactions, reducing tax uncertainty and potential dispute risks. At present KSA only accepts unilateral APA’s but as time matures bilateral and multi-lateral APA’s will be introduced. In May 2026 ZATCA has concluded its first APA with a large multinational group.
On 12 May 2025, Saudi Arabia approved major amendments to the existing White Land Tax Law, details emerged regarding the expanding scope of the White Land Tax Law now effectively the White Land and Vacant Real Estate Tax Law.
White Land Tax: Up to a 10% rate of land value applies to undeveloped plots of at least 5,000 square meters in designated zones.
Vacant Real Estate Tax: A newly clarified rate of up to 5% will target developed but entirely vacant or unutilized commercial and residential structures.
E-Invoicing: Oman Tax Authority registered Application Service Providers (ASPs) and opened sandbox testing for Phase 1 taxpayers using Oman’s localized Peppol PINT specifications.
2026 Budget: Continued focus on growing non-oil revenues. Personal Income Tax still slated for January 1, 2028; near-term priorities are tightening VAT compliance and preparing businesses for e-invoicing and the Global Minimum Tax.
Trade Boost: Signed the Oman–India CEPA, expected to drive trade and investment flows.
DMTT rollout: Tested reporting features on its new portal and helped large MNEs (global revenues over €750M) prepare for local compliance ahead of formal filing deadlines.
VAT guidance refresh: Updated several guides throughout the year: General Guide (Jan), Imports & Exports + Healthcare (Mar), and Tax Agent/VAT Representative (May).
Kuwait introduced a specific Voluntary Advance Tax Payment Mechanism tailored for Multinational Enterprise (MNE) Groups. This allows large entities impacted by global minimum tax trends to structurally manage potential Pillar 2 exposures by remitting advance tax components to the Kuwaiti tax framework, signaling a slow but steady approach toward international alignment.
On May 20, 2026, the GCC marked a historic milestone by concluding the First GCC–UK Free Trade Agreement (GCC-UK FTA) — its first such pact with a G7 nation. The agreement is set to reshape the indirect tax and customs tariff landscape for goods flowing between the UK and the Gulf, introducing zero or highly preferential tariff rates across key industrial and consumer sectors, while streamlining customs procedures and documentation requirements to ease cross-border trade.
Although the agreement has been concluded, it has not yet been ratified or implemented, meaning preferential tariff treatment will only take effect once it formally enters into force. For UAE-based businesses engaged in UK trade, this presents a significant strategic opportunity to review supply chains, sourcing arrangements, and pricing models in anticipation of the cost advantages once the FTA is activated.
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