The 2026 timeline
| Date | Change | Instrument |
|---|---|---|
| 1 January 2026 | No self-invoice for reverse charge; five-year limit on carrying forward credits and on refund claims; input tax can be denied where a supply is linked to evasion | Federal Decree-Laws 16 and 17 of 2025 |
| 14 January 2026 | Reverse charge on metal scrap between registered businesses | Cabinet Decision 153 of 2025 |
| 1 April 2026 | Voluntary disclosure only above AED 10,000, within 20 business days; records kept two extra years while a refund is pending | Cabinet Decision 17 of 2026 |
| 14 April 2026 | New penalty table: 14% a year for late payment, 1% a month for disclosures, AED 500 for an incorrect return | Cabinet Decision 129 of 2025 |
| 1 July 2026 | E-invoicing pilot and voluntary adoption open | Ministerial Decision 244 of 2025 |
| 30 October 2026 | Businesses with revenue of AED 50 million or more must have appointed an accredited e-invoicing provider | Ministerial Decision 244 of 2025, as amended |
| 31 December 2026 | Last day to claim or use VAT credits from periods ending up to 2021 | Decree-Law 17 of 2025, transitional rule |
Each change, and what to do
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Self-invoicing for the reverse charge is gone
You no longer issue a tax invoice to yourself when you account for VAT on imports. Keep the supplier invoice and import documents instead; they are now your only evidence for the box 10 recovery.
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Credits now expire
Excess input tax can be carried forward, and refunds requested, for five years from the end of the period. Older credits have until 31 December 2026. Check the age of any balance on your account now.
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Input tax can be denied for evasion in your supply chain
If a purchase is connected to tax evasion and you knew or should have known, the FTA can refuse the recovery. Not checking counts as should-have-known. Verify suppliers' TRNs and keep evidence that you did, especially in gold, electronics and scrap.
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Smaller errors go in the next return
Only errors with a tax difference above AED 10,000 need a voluntary disclosure, within 20 business days of discovery. Write down the date you find any error; it starts the clock.
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Penalties are lower, but they never stop growing
Late payment is 14% a year instead of 2% plus 4% a month. Disclosures cost 1% a month instead of a stepped percentage. The incentive is now simple: fix things the month you find them.
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Metal scrap joins the reverse charge
Scrap dealers and recyclers now buy and sell between registered businesses without VAT, with written declarations from the buyer. Collect them before the first invoice.
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E-invoicing is months away
Large businesses go live on 1 January 2027, everyone else on 1 July 2027 after appointing a provider by 31 March 2027. Voluntary use before your phase carries no penalties, so the pilot is the cheapest place to find problems.
Questions people actually ask
Did the UAE VAT rate change in 2026?
No. The standard rate is still 5%. The 2026 changes are about evidence, time limits, corrections, penalties and e-invoicing, not the rate.
Which change is most urgent?
The 31 December 2026 deadline for older VAT credits, because missing it loses money for good. If you are in the AED 50 million group, the 30 October 2026 provider appointment is a close second.
Do the new penalties apply to returns for 2025?
The new table applies from 14 April 2026. How it treats amounts that were already late on that date is a transitional question; if a significant penalty is at stake, get advice on the specific periods.
Where these facts come from
Checked against the following on 8 October 2026. Rules and dates change — if you are reading this long after that date, verify before you act on it.
- KPMG — Federal Decree-Laws No. 16 and 17 of 2025
- DLA Piper — Cabinet Decision 129 of 2025 penalties
- Cabinet Decision No. 17 of 2026 (analysis)
- Cabinet Decision No. 153 of 2025 — metal scrap (analysis)
- Ministry of Finance — eInvoicing programme
- DLA Piper — Small Business Relief extended to 2029
WisoBooks is a bookkeeping and business-management tool, not an accounting, tax or legal advisor. Nothing on this page is tax advice, and tax rules change. Confirm your own obligations with the relevant authority or a qualified advisor.
