UNITED ARAB EMIRATES Trends and Developments Contributed by: Yasser Omar and Laryssa Perkins, Hadef & Partners LLC
• private subscription offerings and listings on finan - cial markets in the UAE by private joint stock com - panies (Article 32), and the removal of the lock-in period in Article 226 (1) for such companies (Article 266 (4)); and • different classes of shares for limited liability com - panies (Article 76), and allows the Cabinet to issue a decision facilitating different classes of shares for public joint stock companies (Article 208). We are awaiting the release of further decisions in relation to the conditions and controls governing the redomiciliation of companies within the UAE and the private subscription offerings and listings of private joint stock companies, which may be issued in 2026. The CCL also clarifies that free zone companies oper - ating outside the zone and within the UAE must carry on activities via a branch or representative office that is subject to the CCL and other mainland laws. Corporate Tax Regime Developments The UAE’s 9% federal corporate tax on taxable income exceeding AED375,000 has now moved into its first full implementation cycle, with the first major filing deadline for companies being 30 September 2025 for entities with a 31 December year end. A pivotal development for 2025 is the introduc - tion through Cabinet Decision No (142) of 2024 of a Domestic Minimum Top-up Tax (DMTT) effective for fiscal years starting on or after 1 January 2025. Align - ing with the OECD’s Pillar Two framework, the DMTT imposes a 15% minimum effective tax rate on UAE- based entities of multinational enterprises (MNEs) with global consolidated revenues exceeding EUR750 mil - lion in two of the last four fiscal years. This ensures that even MNEs benefiting from nil or low tax rates or other incentives in the UAE could be subject to a “top- up” tax to meet the global minimum, with the resulting DMTT collected in the UAE. Looking ahead to 2026, the tax landscape is antici - pated to continue to evolve further with the possible introduction of new incentives to support sustainable growth, innovation, and investment.
• Following public consultation, the Ministry of Finance announced in December 2024 that it is considering an expenditure-based research and development (R&D) tax incentive, offering a poten - tial refundable credit of 30-50% on certain qualify - ing R&D activities within the UAE, for tax periods starting on or after 1 January 2026. • Another incentive being considered is a refundable tax credit for high-value employment activities to encourage businesses to engage in activities that deliver significant economic benefits, stimulate innovation, and enhance the UAE’s global competi - tiveness. The E-Invoicing Mandate of 2026 The UAE is moving forward with the digital transfor - mation of its VAT system by implementing a mandato - ry electronic invoicing regime (e-invoicing). Following amendments to Federal Decree-Law No (8) of 2017 on Value Added Tax in late 2024, the legal foundation is now set for a phased rollout. In October 2025, two ministerial decisions were released announcing that a taxpayer working group will commence a pilot programme on 1 July 2026 for the purpose of testing and implementing the e-invoic - ing system under the supervision of the Ministry of Finance. Voluntary adoption is also permitted from this date. • Persons subject to e-invoicing with annual revenue of at least AED50 million must appoint an Accredit - ed Service Provider (ASP) by 31 July 2026 and fully implement e-invoicing for all business-to-business (B2B) and business-to-government (B2G) transac - tions by 1 January 2027. • Persons subject to e-invoicing with annual revenue below AED50 million must appoint an ASP by 31 March 2027 and implement e-invoicing by 1 July 2027. The system will leverage the international Pan-Euro - pean Public Procurement Online (PEPPOL) network, requiring businesses to use an ASP to issue and transmit invoices in a structured digital format (XML or JSON). Failure to comply will lead to penalties and, critically, may invalidate invoices for the purpose of recovering input tax. Businesses are advised to begin
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