From 1 October 2026, a Tax Invoice alone will nolonger support input tax recovery

The Federal Tax Authority (FTA) has issued Decision No. (13) of 2026. It was approved by the FTA Board of Directors on 23 June, issued on 22 July, and comes into effect on 1 October 2026.

The Decision sets out how Article 54 bis of the VAT Law — introduced by Federal Decree-Law No. (16) of 2025 — will operate in practice. The change is straightforward: to recover input tax, it is no longer sufficient to hold a valid Tax Invoice from your Supplier. You must be able to demonstrate that you carried out due diligence on that Supplier.

What the Decision provides

Where a Supply forms part of a chain connected to Tax Evasion, the FTA may disallow the recipient’s input tax recovery — provided the Taxable Person knew, or should have known, of that connection.

The critical point: failure to perform the prescribed verification procedures is itself treated as “should have known”. Good faith is no longer presumed — it must be documented in advance.

Value over a rolling 12-month period	Requirement
Up to AED 10,000 per Supply (exclusive of Tax)	No verification procedures required
Above AED 100,000 from a single Supplier	The AED 10,000 relief ceases to apply — full verification regardless of the value of the individual Tax Invoice
Above AED 375,000 from a single Supplier	In addition: written confirmation of the Supplier’s bank account details and a reputation check against open sources

Scope of the required verification

In respect of the Supplier:

• Identity and legal capacity — identification documents in the case of a natural person, or trade licence and commercial registration details verified against the official registers, together with documents evidencing the authority of the authorised signatory;
• Registered address and actual place of business — verified electronically or by physical site visit;
• Risk indicators — frequent changes of address or of key personnel, and transaction volumes inconsistent with the size and trading history of the entity.

In respect of the Supply:

• Genuine commercial substance to the transaction, and not merely supporting documentation;
• Justification for the payment terms — payments to third parties, or to accounts held outside the Supplier’s country, require written explanation;
• Preference for settlement through banking channels; cash only where there is clear commercial justification and within the prescribed limits;
• Pricing and margins consistent with prevailing market terms;
• The Goods or Services supplied must fall within the Supplier’s licensed activity;
• Transparency as to the origin of the Goods and the role of any intermediary.

Governance requirements

The Decision requires not only that the verification be performed, but that it be evidenced:

• Verify the Supplier at the first transaction, and re-perform the verification where more than 12 months have elapsed since the last check;
• Retain the supporting records in a form capable of being reviewed by the FTA;
• Maintain a documented internal policy identifying the persons responsible for performing the verification procedures, for their review, and for oversight of the process.

This last requirement is frequently underestimated. The FTA’s interest extends beyond
whether the check was performed to whether a documented internal procedure with
designated owners is in place.

Action points before 1 October

1. Extract your active Supplier listing and flag those exceeding the AED 100,000 and AED 375,000 thresholds on a rolling 12-month basis.
2. Obtain or refresh trade licence, registration and identification documents for the flagged Suppliers.
3. Confirm that each Supplier’s actual activity is consistent with what is stated on its Tax Invoices.
4. Review your settlement arrangements — cash payments and payments to third parties will require written justification.
5. Prepare an internal verification policy and assign responsibility for it.
6. Brief your accounts and procurement functions.
7. Establish a record-keeping system for verification documentation.

How we can assist

The drafting of the Decision leaves considerable scope for interpretation: what depth of verification is sufficient for a given sector, how the justification for cash settlement should be documented, what constitutes acceptable evidence of a place of business, and how a policy should be structured so as to withstand FTA review.

MDL Advisers advises on the practical application of Decision No. (13) of 2026: we review your Supplier settlement structure, determine which verification mechanisms are required in your particular case, prepare the internal policy and onboarding checklists, and carry out a review of your existing Supplier base against the thresholds.

There is limited time before the Decision takes effect. Contact us and we will review your position and propose a specific set of procedures.

Swiss Tower, 34th Floor, JLT, Dubai

Why Every Expat in the UAE Needs a DIFC Will

You’ve lived in Dubai for a few years now. You built a career, saved money, maybe bought an apartment, maybe opened a company. All of it for your family.

There’s one question almost nobody asks in advance: what happens to all of it if something happens to you?

Most people don’t know. Their wives, husbands and children find out later, through frozen accounts, court hearings and months of waiting.

The answer depends almost entirely on one thing: whether you made a Will that actually works in the UAE. Because the Will you signed back home may not be the document that decides.

Why Your Foreign Will May Not Do What You Think

Clients come to us confident.

Usually, no.

Private international law works on a simple principle: assets located in a country are dealt with under the rules of that country. Your apartment in Dubai answers to UAE law, not to German, Indian, British or American law.

This is not a technicality. Article 17 of the UAE Civil Transactions Law provides that UAE law governs the disposal by a foreigner of real estate situated in the State, and the 2022 civil personal status reforms expressly preserved that article. Your London or Moscow Will may be entirely valid at home and still not be the instrument that determines who receives your Dubai property.

Even where a foreign Will is relevant, your family cannot simply hand it to a bank. It has to be notarised and legalised in the country of origin, attested in the UAE, and translated into Arabic by a sworn translator. Then it goes before a local court, which decides what weight to give it.

While that runs, everything stops. Bank accounts stay frozen. The apartment cannot be sold or transferred. A company with a single owner and signatory stops trading. Minor children have no legally appointed guardian, and when one is appointed, the court chooses, not you.

What This Looks Like in Practice

The apartment

A European professional lived in Dubai for years and bought an apartment for around AED 1.5 million. Married, one son. He had a Will at home leaving everything to his wife. He believed the matter was handled.

When he died, his widow went to transfer the property into her name. She was told the apartment formed part of an estate and that a court order was required.

The proceedings ran for seven months. The foreign Will did not settle the question; it became one more document to be assessed. She eventually received a share, not the whole apartment she had expected. For seven months she could not sell it, mortgage it, or do anything with it at all.

It was money her husband had spent a decade accumulating for exactly this moment. And at that moment, the family could not reach it.

The company

A businessman held one hundred per cent of a free zone company. Sole shareholder. Sole director. The only person who signed anything or moved money.

He had no UAE Will.

His accounts were frozen within days. The free zone authority would not register any change of shareholder without a court order. The company could not pay suppliers, could not pay salaries, could not sign new contracts.

Clients left. Staff left. Creditors filed claims. The court process took ten months.

The family inherited a company. It was worth a fraction of what it had been on the day he died.

What UAE Law Actually Says Today

There is a belief that circulates in every expat group chat in Dubai: die here without a Will and your estate is carved up under Sharia. For non-Muslims, that has not been the default position for over three years.

Since 1 February 2023, Federal Decree-Law No. 41 of 2022 on Civil Personal Status has applied to non-Muslims living in the UAE. Article 11 does two things.

First, it confirms that you may leave a Will covering all of the property you own in the UAE, in favour of anyone you choose.

Second, it sets out what happens if you don’t. Half of the estate passes to your surviving spouse. The other half is divided equally among your children, with no distinction between sons and daughters. If you have no children, that second half passes to your parents, or is split between a surviving parent and your brothers and sisters.

This was a genuine reform and it is worth knowing about. But look closely at what it gives you: a fixed statutory formula, applied by a court, after you are gone.

Why the default formula is not a plan

It recognises only four categories of person. Spouse, child, parent, sibling. A partner you never married is not an heir. A stepchild is not an heir. A child you raised but never legally adopted is not an heir, and UAE law does not treat adoption the way most home jurisdictions do.

It says nothing about which asset goes to whom. Your spouse and children become co-owners of the apartment, the company shares and the brokerage account in fixed proportions. If they later disagree about whether to sell, that is a dispute, not a plan.

It does not appoint a guardian for your minor children. That decision goes to a court that never met you.

It does not appoint an executor. Somebody still needs authority to deal with the banks, the Land Department and the free zone registry. Until a court names that person, nobody has it, and nothing moves.

And your own family can displace it. Under Article 11, the heirs of a foreign national may ask for the law of the deceased’s home country to be applied instead, unless a registered Will provides otherwise. That sounds like useful flexibility. In practice it is a lever. Where heirs disagree, one of them can pull it, and the estate stalls while the court works out which law governs and what that law actually says.

The problem is not that the law is unfair. The problem is that it gives every family the same answer. A Will gives you yours.

What Actually Happens to Your Bank Accounts

Let us be precise here, because there is a great deal of loose talk on this point.

When a UAE bank is notified that an account holder has died, it freezes the account. This happens whether or not you have a Will. A Will is not a bypass. Joint accounts are normally frozen too. The widespread assumption that a joint account simply passes to the survivor does not hold in the UAE.

The account is released when the bank is shown a succession order or grant of probate from the competent court, identifying who is entitled to the funds and who is authorised to collect them.

So the real question is not whether the freeze happens. It is how long it lasts.

Without a registered Will, the court must first establish who the heirs are, which law applies, and whether the foreign documents your family produces are authentic. Marriage certificates, birth certificates and any foreign Will must be notarised, legalised, attested and translated. Each step takes weeks. Each is a point at which the file can be returned for correction. Months is the normal outcome, not the worst case.

With a registered DIFC Courts Will, the position is different. The Will is already on the register. It is already in English, with no Arabic translation required. It sits within a common-law framework with a dedicated probate registry, and its validity is not the thing being argued about. The executor you named applies to the DIFC Courts, and a probate order issued there is enforceable across the UAE without a separate action in the local courts. Weeks rather than months is a realistic expectation.

What protects your family in the first month

A Will shortens the freeze. It does not eliminate it. If your household would struggle with no access to the main account for six to eight weeks, plan for that separately.

• Keep a working account in your spouse’s sole name, funded with three to six months of living costs. It is their asset, not yours, so it does not form part of your estate.
• Check how your life insurance pays out. A policy with a properly named beneficiary generally pays outside the estate, and far faster than probate.
• If you own a company, give at least one other person bank signing authority. Otherwise the business stops trading on the day you do.
• Leave an accessible record of accounts, policies, properties and digital assets. Families routinely lose money for no reason other than that nobody knew an account existed.

The Instrument That Solves This: A DIFC Courts Will

Dubai operates a separate court system for the International Financial Centre, the DIFC Courts. They are common-law courts, they work in English, and since 2015 they have maintained a dedicated Wills register for non-Muslims.

A DIFC Courts Will lets you replace the statutory default with your own instructions. You decide who receives the apartment. You decide who receives the company shares, and in what proportions: equal, unequal, or weighted towards one person for reasons only you know. You appoint the executor who Will carry it out. You appoint guardians for your children.

Since the 2019 rule changes, a DIFC Will can cover assets located anywhere in the UAE, not only Dubai and Ras Al Khaimah. Guardianship provisions remain limited to minor children resident in Dubai or Ras Al Khaimah.

There are five Will types: a Full Will covering everything you own in the UAE; a Property Will for up to five UAE properties; a Financial Assets Will for UAE bank and brokerage accounts; a Business Owners’ Will for shareholdings in up to five UAE companies; and a Guardianship Will dealing only with children.

Drafting and registration typically take two to three weeks. Registration can be completed virtually, from anywhere in the world.

Five Steps to Getting This Done

1. Inventory what you own in the UAE.
   Real estate: address, name on the title, any mortgage. Bank accounts: which institutions, approximate balances, which are joint. Company shareholdings: percentage, free zone or mainland, who your partners are. Digital assets: crypto holdings and where the keys are.
2. Decide who receives what.
   Be specific. Not “my family” but named individuals, with percentages or identified assets. Vagueness is what gets Wills challenged.
3. Appoint executors.
   A primary executor who Will handle everything, and a substitute in case the first cannot act. They do not need to live in the UAE.
4. If you have children, appoint guardians.
   A permanent guardian, who may be abroad, and an interim guardian physically present in the UAE who can make immediate decisions until the permanent guardian arrives. Note that DIFC guardianship provisions apply to minor children resident in Dubai or Ras Al Khaimah.
5. Use an accredited draftsman.
   Not simply any lawyer. Someone listed on the DIFC Courts Register of Will Draftsmen. The register is public and the list is short. This matters because a badly drafted Will, internally inconsistent, or inconsistent with how your assets are actually held, can be challenged, and a challenged Will can leave your family exactly where they would have been with no Will at all.

Who Actually Needs This

If you own assets in the UAE. If you have a spouse, a partner or children. If you care what happens to what you have built.

If you arrived last month and own nothing here yet, you can wait until you buy property or take a shareholding.

If you have been here five or ten years, you are already late.

Frequently Asked Questions

Does my Will from my home country cover my Dubai apartment?
Not automatically. UAE law governs the disposal by a foreigner of real estate situated in the UAE. A foreign Will may still be relevant to other assets, but it must be legalised, attested and translated into Arabic, and then survive review by a local court, a process measured in months rather than weeks.

What happens if I die in the UAE without any Will?
For a non-Muslim, Federal Decree-Law No. 41 of 2022 applies. Half of the estate passes to the surviving spouse and half is divided equally among the children, regardless of gender. With no children, it passes to parents and siblings. A court applies that formula. It does not appoint the executor or guardian you would have chosen.

Is Sharia law still applied to non-Muslims?
Since February 2023 it is no longer the default for non-Muslims. But the civil default that replaced it is still a fixed statutory formula rather than your instructions, and the heirs of a foreign national may apply to have home-country law used instead unless a registered Will provides otherwise.

Who can register a DIFC Courts Will?
Any non-Muslim aged 21 or over who owns assets in the UAE, or has minor children resident in Dubai or Ras Al Khaimah. You do not need to be a UAE resident, and your executors and guardians do not need to live here either.

What types of DIFC Will are available?
Five: Full, Property (up to five UAE properties), Financial Assets (UAE bank and brokerage accounts), Business Owners’ (shareholdings in up to five UAE companies), and Guardianship.

Does a DIFC Will cover assets outside Dubai?
Yes. Since the 2019 rule changes it can cover assets located anywhere in the UAE. Guardianship provisions remain limited to minor children resident in Dubai or Ras Al Khaimah.

Do I have to be in Dubai to register?
No. Registration can be completed virtually from anywhere in the world, with two witnesses, before the Registrar or an Authorised Officer.

Will my bank accounts still be frozen if I have a DIFC Will?
Yes. Accounts are frozen on notification of death regardless of what Will exists. What a registered DIFC Will changes is how quickly they are released, weeks rather than months, because the Will’s validity is not in question and the probate order is enforceable across the UAE without a separate local court action.

How long does it take to put a DIFC Will in place?
Two to three weeks in a straightforward case: drafting and review, then a registration appointment. Estates involving companies, trusts or significant overseas assets take longer.

Can I change my Will later?
Yes. A DIFC Will can be amended or revoked at any time. Review it after marriage, divorce, the birth of a child, a property purchase or a change in company ownership.

My spouse and I both want Wills. Is one document enough?
No. One Will cannot cover two people. Couples register mirror wills, two separate documents in substantially matching terms.

I own a company in a free zone. What happens to it?
If you are the sole shareholder and signatory, the free zone authority Will generally not register any change without a court order, and the bank Will not release company funds meanwhile. A Business Owners’ Will, combined with a second authorised signatory, is what keeps the business trading.

What about crypto and other digital assets?
Entitlement is one problem; access is another. A Will can direct who inherits, but nobody can recover a wallet without the keys. Digital assets need both a testamentary provision and a secure, retrievable record of access.

Do I actually need a lawyer for this?
There is no legal requirement to use one. But a poorly drafted Will can be challenged, and a challenged Will can leave your family in the same position as no Will at all. If you use an adviser, use one listed on the DIFC Courts Register of Will Draftsmen.

How to Start

A first consultation takes thirty minutes. We look at your situation, identify which assets need to be covered and which instrument fits, and answer your questions. You do not need to come to the office.

Email: info@emiraldlegal.ae
Phone / WhatsApp: +971 58 986 0944

Emirald Legal Consultants advises on succession, Wills, family foundations and asset protection for individuals and families living in the UAE and the wider Middle East.

UAE Corporate Tax 2026: Rates, QFZP, Penalties & New Rules

UAE Corporate Tax arrived in June 2023, but 2026 is the year it gets real. This is the first time the full compliance cycle is running at full scale: returns are being filed, the FTA has started auditing, and the whole penalty framework has just been overhauled. If you’ve been putting off a proper look at your tax position, now is the moment.

This article sets out the essential facts in plain language: who pays, who does not, what the penalties are, what changed in 2026, and why the decisions you make now will determine your tax exposure for years to come.

Why 2026 Is the Year That Actually Matters

Corporate Tax slipped in quietly in June 2023, and plenty of businesses, especially in the free zones, assumed the 0% rate meant they had nothing to worry about. That assumption could now cost you.

The first corporate tax returns for financial years ending 31 December 2024 were due by 30 September 2025. Returns for FY 2025 are due by 30 September 2026. The FTA has confirmed it is actively conducting audits.

Two major legislative updates took effect in early 2026:

• Federal Decree-Law No. 17 of 2025 (new Tax Procedures Law), in force from 1 January 2026
• Cabinet Decision No. 17 of 2026 (updated Executive Regulation), in force from 1 April 2026
• Cabinet Decision No. 129 of 2025 (reformed penalty framework), in force from 14 April 2026

Each of these changes has direct practical consequences for how you manage your tax position, your documents, and your exposure to FTA enforcement.

Who Pays, Who Does Not: Rates, Thresholds and Exemptions

UAE Corporate Tax applies to juridical persons (companies) and natural persons conducting business activities with revenue exceeding AED 1,000,000 per year. The rate structure has four distinct positions:

• Standard rate on taxable income above AED 375,000:  9%
• Taxable income up to AED 375,000:  0%
  Qualifying Free Zone Person (QFZP) on qualifying income:  0%
• Qualifying Free Zone Person (QFZP) on qualifying income:  0%
• Small Business Relief (revenue ≤ AED 3 million):  Effectively 0%

Small Business Relief (SBR)

Under Ministerial Decision No. 73 of 2023, UAE-resident businesses with revenue not exceeding AED 3 million per tax period can elect to treat their taxable income as nil. The election eliminates the tax liability and simplifies Transfer Pricing compliance; companies below this threshold are exempt from the formal TP documentation requirements, provided they apply arm’s length pricing.

Exempt Entities

Government entities, extractive businesses, qualifying public benefit organisations, qualifying investment funds, and UAE-resident pension and social security funds are exempt from Corporate Tax. Public joint-stock companies listed on a UAE exchange may have different treatment. If you are in any of these categories, you still need to register with the FTA and file an annual declaration.

Free Zones: The 0% Rate Is Not Automatic

This is the single most misunderstood part of UAE Corporate Tax. Being in a free zone does not automatically mean you pay 0%. That rate is reserved for a Qualifying Free Zone Person (QFZP), and the conditions are strict and specific.

QFZP Conditions

To qualify, a free zone company must:

• Maintain adequate substance in the UAE (physical presence, qualified employees, operating expenditure)
• Derive income that qualifies as Qualifying Income under the rules
• Not have elected to be subject to the standard 9% rate
• Comply with Transfer Pricing requirements
• Meet the de minimis threshold for non-qualifying income (the lesser of AED 5 million or 5% of total revenue)

If a QFZP’s non-qualifying income exceeds the de minimis threshold, all of its income, including income that would otherwise qualify, becomes taxable at 9%. This is the ‘QFZP cliff’.

What Counts as Qualifying Income

Qualifying Income broadly includes income from transactions with other free zone persons and income from certain activities specified by the Ministry of Finance. Income from transactions with mainland UAE persons, or from certain excluded activities, is non-qualifying. Notably, income derived from holding shares in a UAE mainland company can be non-qualifying, a critical issue for holding structures that mix free zone and mainland entities.

QFZP and the Tax Opinion

Given the complexity of the QFZP rules and the severity of losing status (9% on all income, retrospectively), we strongly recommend obtaining a formal Tax Opinion validating your QFZP position before filing. The cost of the opinion is negligible compared to the tax exposure of getting it wrong.

Document Retention: Know Your Obligations

The rules on how long you must keep your tax records depend on the tax type, and 2026 brought important updates.

• Corporate Tax records (all types):  7 years (UAE Corporate Tax Law)
• VAT records (standard period):  5 years (Tax Procedures Law)
• Real estate records:  7 years
• Pending refund application (both CT and VAT):  +2 additional years (Cabinet Decision No. 17/2026)

Cabinet Decision No. 17 of 2026, effective 1 April 2026, added a new rule: if you have submitted a refund application that has not yet received a final FTA decision, you must retain all related records for an additional two years beyond the standard period. The clock does not stop until the FTA issues its decision.

This matters for businesses with large VAT credit balances that have been pending for extended periods; your retention obligation is longer than you may think.

Penalties: The Old Regime vs the New (From April 2026)

Cabinet Decision No. 129 of 2025, effective 14 April 2026, fundamentally reformed the penalty framework for VAT. The corporate tax penalty framework (Cabinet Decision No. 75 of 2023) was not replaced; it was always structured differently. Here is the complete picture:

Failure to Maintain Records

• First violation:  AED 10,000
• Repeated violation within 24 months:  AED 20,000

Late Registration for Corporate Tax

• Penalty:  AED 10,000  (one-time)

Late Filing of Tax Return

• First 12 months:  AED 500 per month
• From month 13 onwards:  AED 1,000 per month

Late Payment of Tax

• Rate:  14% per annum  (approximately 1.167% per month)
• Applied to:  Unpaid tax balance from the day after due date

Under the old VAT penalty regime, late payment attracted 2% immediately + 4% per month up to a ceiling of 300% of the tax owed. The new fixed rate of 14% per annum is a significant reduction, but it is still 14% per year, compounding monthly on your unpaid balance.

Incorrect Tax Return

• Penalty:  AED 500  (unless corrected before deadline or via Voluntary Disclosure)

New AED 10,000 Voluntary Disclosure Threshold (from 1 April 2026)

Cabinet Decision No. 17 of 2026 introduced a two-track system for correcting tax errors. If the underpayment exceeds AED 10,000, you must file a Voluntary Disclosure with the FTA within 20 business days of discovering the error. For errors of AED 10,000 or less, you can correct directly in the next tax return.

Voluntary Disclosure: The Financial Case for Acting Early

This is one of the most powerful tools available to UAE taxpayers, and one of the least understood. The penalty difference between disclosing an error before an audit and having that error discovered by the FTA is dramatic:

• Error disclosed before FTA audit notice:  1% per month  on the tax difference
• Error found by FTA during audit:  15% fixed penalty  +  1% per month

Let’s make this concrete. Suppose your company underpaid AED 500,000 in corporate tax two years ago (24 months):

• Voluntary Disclosure: 1% × 24 months = 24% × AED 500,000 = AED 120,000
• FTA discovers it: 15% + (1% × 24 months) = 39% × AED 500,000 = AED 195,000

The difference is AED 75,000. On larger errors, the gap becomes enormous. The voluntary disclosure option is available right up until the moment the FTA notifies you of an audit, which is why running a pre-filing review is not optional, it is financial self-defence.

Transfer Pricing and Related Party Disclosures

Transfer Pricing (TP) rules apply to every UAE taxable person that enters into transactions with Related Parties or Connected Persons, regardless of size. The arm’s length principle is not optional.

Three Tiers of Obligation

Tier 1. All taxable persons:  Apply arm’s length pricing to all related-party transactions. If challenged, you must be able to demonstrate the pricing was commercially justified.

Tier 2. Annual TP Disclosure Form:  Every taxable person with related-party transactions must submit a TP Disclosure Form with their CT return. Transactions with Connected Persons must be disclosed if payments or benefits to each Connected Person exceed AED 500,000 annually.

Tier 3. Master File and Local File:  Companies with UAE revenue of AED 200 million or more, or that are part of a Multinational Enterprise group with global consolidated revenue of AED 3.15 billion or more, must maintain a Master File and Local File under Ministerial Decision No. 97 of 2023. These documents are not filed annually but must be produced within 30 days of an FTA request.

• TP Disclosure Form: Filed with every CT return
• Connected Persons disclosure threshold: AED 500,000 per person per year
• Master File / Local File threshold (UAE revenue): AED 200 million
• Master File / Local File threshold (MNE group): AED 3.15 billion consolidated global revenue
• Retention period for TP documents: 7 years
• FTA request deadline for Master / Local File: 30 days from request

Intra-UAE Transactions

TP rules apply even to transactions between two UAE entities, for example, between a free zone company and its mainland subsidiary. This is a common oversight. If your group has intercompany service fees, loans, royalties, or management charges flowing between UAE entities, those transactions need to be at arm’s length and documented.

The Largest Groups: DMTT and OECD Pillar Two

If your group has global consolidated revenues of EUR 750 million or more in at least two of the last four financial years, you are in scope for the UAE Domestic Minimum Top-Up Tax (DMTT), the UAE’s implementation of the OECD’s Pillar Two global minimum tax framework.

• DMTT threshold:  EUR 750 million consolidated global revenue
• Minimum effective tax rate:  15%
• Effective from:  Financial years beginning on or after 1 January 2025
• Authority:  Cabinet Decision No. 142 of 2024

The DMTT applies to all UAE entities within qualifying groups, including entities in free zones that currently benefit from 0% or 9% rates. If the group’s effective tax rate in the UAE falls below 15%, the DMTT tops it up.

A transitional grace period applies: no penalties for DMTT return filing for periods beginning on or before 31 December 2026 (not including periods ending after 30 June 2028), provided the group has taken reasonable measures to apply the rules correctly.

What You Should Do Right Now

Corporate Tax in the UAE is no longer a future concern. It is an active compliance obligation with real penalties, live FTA audit activity, and a framework that is still evolving. The businesses that manage it well in 2026 will have a structural advantage: lower risk, cleaner books, and a tax position that supports rather than threatens their operations.

Five actions, in order of priority:

1. Confirm your entity’s tax status (QFZP, standard taxpayer, SBR, or exempt) in writing, with analysis.
2. Obtain a Tax Opinion if you are claiming QFZP status and have any related-party or mainland transactions.
3. Run a pre-filing review of prior-year CT returns before the FTA selects you for audit. The Voluntary Disclosure window is finite.
4. Assess Transfer Pricing compliance: all related-party transactions must be documented and at arm’s length.
5. If your group approaches EUR 750 million in global revenue, begin DMTT scoping immediately.

At MDL Advisers FZCO we handle Corporate Tax advisory, Tax Opinions, Voluntary Disclosure support and Transfer Pricing documentation for companies across every UAE jurisdiction. Reach us at info@advisers.ae or +971 4 561 3720.

DMCC Company Setup 2026: FZCO Deadline, New Rules & Structures

DMCC (Dubai Multi Commodities Centre) is Dubai’s largest and one of the world’s most prestigious free zones — home to over 26,000 companies from more than 180 countries. The setup process is fully digital, most steps completed online, registration typically takes around two weeks, and licence costs start from approximately AED 20,285 per year.

Here’s the catch: 2024 to 2026 brought the biggest wave of regulatory change in DMCC’s history. Whether you’re setting up for the first time or you’ve been a member for years, this is what actually matters right now.

The FZCO Suffix Requirement — Deadline: 30 June 2026

From 2 January 2025, every new company registered in DMCC carries the suffix FZCO (Free Zone Company). Branch establishments use FZ Branch. This is not optional — it is a regulatory mandate aligned with UAE federal corporate identification standards.

Existing companies have until 30 June 2026 to update their names. The change is free of charge and is processed entirely via the DMCC Member Portal — no document uploads are required.

The UBO Register — Where the Real Penalties Hide

So who counts as a UBO? An Ultimate Beneficial Owner is any natural person who directly or indirectly owns or controls 25% or more of a company. If no one meets that bar, it’s whoever actually pulls the strings through other means — voting rights, board appointment, contractual rights. And if neither applies, the senior management official is treated as the UBO.

DMCC’s threshold is stricter than the federal standard: all owners holding 10% or more must be registered and verified. Any change in ownership or control of 25% or more must be reported via the DMCC portal within 15 days of the change.

Penalties for non-compliance with the UBO register requirement:

• First violation: written warning
• Second violation: AED 50,000
• Third violation: AED 100,000
• Additional sanctions may apply under Federal Decree-Law No. 10 of 2025 on AML/CFT, in force since 14 October 2025

Beyond fines, inaccurate or outdated UBO records are consistently cited by UAE banks as a trigger for blocked account openings and failed KYC reviews. In practice, UBO compliance and banking access are inseparable.

The Annual Audit — One Deadline You Can’t Miss

For companies with a financial year ending 31 December 2025, the audit submission deadline is 30 June 2026 (180 days from year-end). This deadline applies to every licensed entity — including dormant companies and startups with zero revenue.

Audit reports must be prepared by a DMCC-approved auditor and submitted through the DMCC Member Portal. An auditor not on the DMCC Approved Auditors List will result in rejection.

Consequences of missing the deadline:

• Financial penalties exceeding AED 10,000 in persistent cases
• Administrative block — licence and visa renewals suspended
• Banking disruptions — banks require current audited financials for account maintenance and credit approvals
• Reputational record in DMCC’s compliance systems, affecting future commercial transactions

New Corporate Structures: Holdings, SPVs, Family Offices, CLGs

October 2024 brought the biggest structural shake-up in DMCC’s history. Four new entity types arrived at once, and together they reshaped how founders can build holding companies, family wealth structures and asset-management vehicles.

Holding Company Licence

A holding company does not conduct operational business but may act as a group head office and employ staff for management purposes. Ideal for multinational groups consolidating UAE subsidiaries, or entrepreneurs creating a clean separation between operating and holding layers.

SPV (Special Purpose Vehicle) Licence

The SPV is a passive holding structure for specific non-operational purposes — asset holding, risk isolation, investment structuring. SPVs are exempt from appointing a company secretary, holding AGMs, and maintaining a physical office. Only a registered office address is required, typically provided by a DMCC-registered corporate services provider.

Family Offices — SFO and MFO

DMCC now offers two dedicated family office licence categories. A Single Family Office (SFO) manages the wealth of one family; all shareholders and directors must belong to the same family, and the applicant must hold at least USD 1 million in liquid or investible assets. A Multi-Family Office (MFO) manages wealth for multiple unrelated families and is subject to more comprehensive regulatory requirements.

Company Limited by Guarantee (CLG)

A CLG has no share capital. Members’ liability is limited to the amount they undertake to contribute on liquidation. Suited to non-profit organisations, trade associations, joint-venture governance entities, and industry bodies that require a formal legal structure without equity ownership.

DMCC Maritime Centre

The DMCC Maritime Centre is a dedicated platform connecting over 150 maritime-related companies: shipping companies, logistics providers, marine services firms, financiers, insurers, legal specialists, and technology providers — all within one ecosystem.

Working alongside DMCC FinX and DMCC Wealth Hub, the Maritime Centre links maritime activity with capital, financing, risk management, and wealth structuring. Relevant licence activities include ship management, ship broking, chartering, cargo inspection, maritime consultancy, and marine insurance — available under service or trading licences.

Share Capital Reforms

Companies with share capital up to AED 50,000 can now deposit capital directly through the DMCC Member Portal, eliminating the need to first transfer funds to a UAE bank account. Companies can also denominate share capital in foreign currencies and open multi-currency accounts with international banks — particularly valuable for founders facing lengthy KYC requirements at UAE banks.

Freelance Licence and Expanded Activities

DMCC’s freelance licence allows individuals to operate independently within the free zone without incorporating a company or holding an employment contract. Combined with over 1,000 approved activities across 20 sectors — including trading, consulting, AI, crypto, commodities, and fintech — DMCC offers one of the broadest activity menus of any UAE free zone.

What This Means in Practice

Setting up — or running — a business in DMCC in 2026 isn’t just a registration exercise anymore. It now comes down to four things:

• Selecting the right entity type: FZCO, FZE, SPV, Holding Company, CLG, or Family Office
• Understanding the tax position: QFZP status, Corporate Tax obligations, Transfer Pricing disclosures
• Maintaining compliant UBO registers and audit filings from day one
• For existing members: completing the FZCO suffix update before 30 June 2026 without exception

We’ve spent over a decade handling DMCC registrations and compliance day in, day out. We help you pick the right structure, get the authority’s procedures right the first time, and steer clear of the administrative blocks and penalties that end up costing far more than the setup ever did.