As everyone seems to be coming back to the region from summer breaks, multiple tax changes and guidance notes have been published, so it is hit the ground running for most tax professionals. Especially in the UAE, various new Decisions and Guides were issued by the authorities on different tax subjects. This month's Gulf Tax Insights provides you with insights on the following topics:
- The UAE Federal Tax Authority (FTA) has issued a new Decision introducing additional compliance requirements for Qualifying Free Zone Persons (QFZPs) engaged in the distribution of goods or materials in or from a Designated Zone. One of the new requirements is that eligible QFZPs must obtain an Agreed-Upon Procedures Report from an independent external auditor, which needs to contain specific information on the QFZPs acquisition and importation of goods. As this Decision introduces significant new compliance and reporting requirements, QFZPs involved in distribution activities should assess their readiness and take steps to ensure timely compliance.
- The UAE FTA has published a new method for converting digital currency values into UAE Dirham (AED), carrying significant implications for businesses transacting in digital currencies and the indirect tax obligations that follow. Digital currency is gaining traction across UAE sectors and those businesses accepting digital currency as consideration are advised to review their existing processes and ensure alignment with the prescribed requirements.
- The UAE Ministry of Finance has announced a three-year extension of the Small Business Relief regime, which will now apply to tax periods ending on or before 31 December 2029. The measure forms part of the UAE's ongoing efforts to support entrepreneurship, promote business growth and maintain a competitive business environment. The existing revenue threshold of AED 3 million remains unchanged.
- The UAE FTA has issued Decision No. 13 of 2026, introducing mandatory supplier and transaction verification requirements that taxpayers must satisfy before recovering input VAT. The new requirements will come into effect on 1 October 2026, which means there is only a short time frame for taxpayers to get prepared.
- Finally, we round up recent tax treaty developments across GCC Member States.
We hope this month's edition of Gulf Tax Insights is helpful, and we look forward to seeing you soon.
