Welcome to the first edition of 2026. As we settle into this new fiscal year, the theme for January is “Digitization and Enforcement.” While the United Arab Emirates has officially enacted its strict new procedural codes, Saudi Arabia has offered a welcome extension to its penalty waiver program, giving businesses a crucial second chance. Meanwhile, Oman is taking a major leap forward by integrating artificial intelligence into its tax administration.
Below is a brief of the critical tax developments from January 2026.
United Arab Emirates
The most significant shift this month is the full implementation of the amendments to the VAT and Tax Procedures laws. These changes move the country from a phase of “getting used to tax” to a phase of strict enforcement and efficiency.
Simplifying the Paperwork for Imports
For years, businesses buying services or goods from abroad had to generate a “self-tax invoice” for their own records to prove they calculated the tax correctly. Effective January 1, 2026, this requirement has been officially removed. You no longer need to create this internal document. However, this does not mean the tax disappears; you must simply rely on the original commercial invoice from your supplier and your customs import documents to prove the transaction took place. This cuts down on administrative busywork but places higher importance on keeping your original vendor files organized.
The “Use It or Lose It” Rule for Refunds
A major change has been introduced regarding how long you have to claim a refund or use a tax credit. There is now a strict five-year time limit. If you have a tax credit sitting in your account, you must use it or request a refund within five years of the date it was created. If you wait longer than that, the right to claim that money is lost forever. To be fair to businesses with old credits, the government has provided a special one-year grace period. If you have credits from the early years (2018, 2019, or 2020), you must submit your refund claim before December 31, 2026.
Stronger Measures Against Tax Evasion
The Federal Tax Authority has been granted stronger powers to stop tax evasion networks. Under the new rules, if a business claims a tax credit on a purchase, but that purchase is linked to a supplier who is evading tax, the Authority can block that credit. This applies even if you didn’t know for sure but “should have known” based on the circumstances. This means businesses now need to be much more careful about vetting who they buy from to ensure their suppliers are legitimate and compliant.
Kingdom of Saudi Arabia: A Final Opportunity for Correction
In a move that surprised many, the Zakat, Tax and Customs Authority (ZATCA) announced a six-month extension to its popular penalty waiver initiative. This program was originally set to expire, but you now have until June 30, 2026, to fix past mistakes.
This is essentially a clean slate offer. If your business has made errors in the past, such as registering late, filing a return late, or failing to pay tax on time, you can now correct these issues without paying the heavy fines that usually apply. To qualify, you must file the missing returns and pay the original tax amount owed. This is an excellent opportunity for companies to review their historical records and fix any hidden liabilities before the window closes in June.
Oman
The tax landscape in Oman is set to become significantly more high-tech. On January 7, the Oman Tax Authority signed a strategic agreement with Nortal, a global digital transformation company, to build a next-generation Tax Management System.
This new system will use Artificial Intelligence (AI) to automate how taxes are collected and checked. Instead of relying solely on human auditors to spot errors, the system will use data analytics to identify patterns that look suspicious, such as gaps in reporting or potential tax evasion. For businesses, this means that the chances of being audited will likely increase, and the audits themselves will be based on much more precise data. It is a clear signal that manual, paper-based processes are ending.
Qatar
The General Tax Authority (GTA) has officially opened the tax filing season for the financial year that ended on December 31, 2025. All businesses are required to submit their tax returns through the online Dhareeba portal.
The standard deadline for this filing is April 30, 2026. It is important to note that Qatar is also moving toward more advanced digital reporting. The Authority has signaled an upcoming shift to a structured data format (known as XBRL) for financial statements. While this might not be mandatory for every single business immediately, it represents a move away from simple PDF or Excel uploads toward a system where the government’s computers can automatically read and analyze your financial data.
Bahrain
Bahrain continues to lead the region in implementing the new global tax rules for massive multinational corporations. On January 26, the National Bureau for Revenue enabled a new feature on its portal for the Domestic Minimum Top-Up Tax (DMTT).
This tax applies specifically to large multinational groups with annual revenues of at least €750 million. While the actual payment and full filing for the 2025 year won’t be due until mid-2027, the fact that the system is already live for Annual Returns allows these large companies to start notifying the government of their status. It is a proactive step that ensures Bahrain is fully aligned with international tax standards.
The information provided in this newsletter is based on official announcements as of February 4, 2026. Tax regulations are subject to change. Readers are advised to consult with a qualified tax professional before acting on this information.
