The United Arab Emirates (UAE) is preparing to implement a series of rule changes in 2026 aimed at improving public health, reducing environmental waste and streamlining the digital economy.
Tiered tax on sugary drinks
Starting 1 January 2026, the Ministry of Finance will overhaul the excise tax on sweetened beverages.
- From flat to tiered: The current 50 % excise tax on sweetened drinks will be replaced by a tiered system that links the tax directly to the amount of sugar per 100 ml. Drinks will be divided into low-sugar (below 5 g per 100 ml), medium‑sugar (5–8 g per 100 ml) and high‑sugar (above 8 g per 100 ml) categories.
- Public‑health goals: Officials say the reform is designed to incentivise beverage manufacturers to reduce sugar content and to encourage healthier habits among residents. Drinks sweetened with artificial sweeteners may attract a 0 % tax under the new model.
Comprehensive ban on single‑use plastics
A UAE‑wide ban on single‑use plastic products will take effect on 1 January 2026. The move expands Dubai’s phased rollout, which already bans plastic bags (since June 2024) and Styrofoam containers (January 2025). The third phase of the programme will prohibit plastic plates, food containers, tableware and beverage cups with plastic lids. Additionally, the import, production and trade of single‑use plastics will be banned from 2026. Eco‑friendly materials such as bamboo, sugarcane and kraft paper are expected to replace plastic packaging.
Simpler VAT rules
Businesses will see administrative relief when changes to the UAE’s Value‑Added Tax (VAT) law come into force on 1 January 2026. The amendments remove the requirement for taxable persons to issue self‑invoices when applying the reverse charge mechanism; taxpayers will instead retain supporting documents such as supplier invoices and contracts. The law also introduces a five‑year statute of limitations for refund claims, meaning claims not submitted within that period will lapse. Authorities will have explicit powers to deny input‑tax deductions linked to tax‑evasion schemes.
Banks retire SMS and email one‑time passwords (OTP)
The UAE’s central bank is tightening digital‑banking security. In June 2025 it ordered all financial institutions to eliminate SMS and email one‑time passwords for transaction authentication. According to an industry analysis of the directive, banks began the transition on 25 July 2025 and must achieve full compliance by 31 March 2026. Customers will instead verify transfers using biometric authentication (face or fingerprint), soft tokens within banking apps or in‑app confirmations. The move aims to reduce fraud, particularly SIM‑swapping scams and phishing attacks that exploit SMS OTP.
Advertiser permit for content creators
The UAE Media Council has mandated that all residents, citizens and visitors who earn money from advertising on social media or other digital platforms obtain an Advertiser Permit. The council extended the registration deadline to 31 January 2026 to give creators more time to comply. Holders of the permit must display their permit number on registered accounts and comply with content standards; exemptions apply to individuals promoting their own products and minors engaged in educational, sports or cultural activities. The permit is valid for one year (three months for visitors) and is intended to increase transparency and consumer protection in the digital advertising sector.
Mandatory electronic invoicing
On 1 July 2026 the UAE will launch a voluntary pilot programme for e‑invoicing, followed by mandatory phases based on company size. Ministerial Decision 244 of 2025 outlines the following timeline:
- July 1 2026: Voluntary pilot for entities that meet technical requirements.
- Entities with annual revenue ≥ AED 50 million: Must appoint an accredited e‑invoicing service provider by 31 July 2026 and comply fully by 1 January 2027.
- Entities with annual revenue < AED 50 million: Must appoint a provider by 31 March 2027 and comply by 1 July 2027.
- Government entities: Required to appoint a provider by 31 March 2027 and comply by 1 October 2027.
Invoices must be issued through accredited providers on the Peppol network and stored electronically in the UAE. The phased roll‑out aims to improve tax compliance and enhance transparency in business transactions.
Unified Friday prayer time across mosques
The General Authority for Islamic Affairs, Endowments, and Zakat has announced a new unified timing for Friday prayers across all mosques in the UAE. Starting from Friday, 2 January 2026, Friday sermons and congregational prayers will begin at 12:45 pm, roughly 30 minutes earlier than the existing 1:15 pm schedule. The authority urges worshippers to adhere to the new time and arrive early so they can fully participate in the sermon and prayer. Officials say the change will provide a consistent schedule and make it easier for communities to organise worship. The 1:15 pm timing was introduced in 2022 to accommodate the UAE’s shift to a Monday‑to‑Friday work week.
Outlook
These rule changes signal a significant shift in the UAE’s regulatory landscape. By targeting unhealthy consumption patterns, reducing plastic waste, enhancing digital‑financial security and modernizing tax administration, the government intends to align public behaviour with the country’s long‑term health, environmental and economic goals. Residents and businesses should prepare well in advance to comply with the new regulations and take advantage of the transition periods offered.
