The UAE is strengthening its tax administration through new rules for digital transaction verification and international information exchange. These developments are changing how businesses manage tax compliance, cross-border transactions and financial reporting.
The Federal Tax Authority (FTA) is introducing clearer requirements for businesses to verify commercial transactions before claiming input VAT. At the same time, the UAE is preparing for new international reporting standards, including the updated Common Reporting Standard (CRS 2.0) and the Crypto-Asset Reporting Framework (CARF).
These changes are part of the country’s wider efforts to improve tax transparency and support cooperation with international tax authorities.
FTA Introduces Stronger Transaction Verification Requirements
One important development is FTA Decision No. 13 of 2026, which took effect on 1 October 2026. The decision sets out requirements for verifying transactions when businesses claim input VAT.
Companies must take reasonable steps to check their suppliers and the details of their commercial transactions. This includes reviewing supplier identity, business addresses, the purpose of a transaction, payment methods and whether the goods or services were actually supplied.
These checks are important for businesses that work with several suppliers or conduct cross-border transactions. If a company fails to carry out the required checks, it may put its input VAT recovery at risk.
The change makes proper VAT compliance and supplier due diligence more important. Businesses should keep clear invoices, contracts, payment records and evidence that supports the commercial purpose of each transaction.
UAE Prepares for CRS 2.0 and CARF
International tax information exchange is another major part of the UAE’s changing tax environment.
The UAE is preparing to implement CRS 2.0 from 1 January 2027, with the first information exchange expected in 2028. The updated standard will strengthen the reporting of financial account information between participating jurisdictions.
The country is also preparing to implement the Crypto-Asset Reporting Framework (CARF) from 2027. This framework aims to improve the exchange of tax information relating to relevant crypto-asset transactions and service providers.
These developments mean that financial institutions and relevant service providers will need to understand their reporting duties. Businesses and individuals with international financial activities should also pay attention to the accuracy of their financial and tax information.
New DMTT Rules Affect Large Multinational Groups
The UAE’s Domestic Minimum Top-Up Tax (DMTT) is another important part of its international tax framework.
The 15% DMTT applies to multinational enterprise groups that meet the relevant revenue threshold. These are groups with consolidated global revenue of at least €750 million in at least two of the four financial years before the year being tested.
The framework is linked to the OECD’s global minimum tax rules under Pillar Two. It aims to ensure that large multinational groups meet the required minimum effective tax rate.
Affected groups need to review their corporate structures, financial statements, tax calculations and reporting responsibilities. Proper corporate tax advisory and transfer pricing documentation can help them understand their obligations and support their tax positions.
International Cooperation Strengthens Tax Transparency
The UAE is also improving its procedures for responding to international tax information requests.
In February 2026, the Ministry of Finance announced Cabinet Decision No. 209 of 2025, which sets out procedures for the exchange of information on request. This can involve relevant ownership, banking and accounting information requested by foreign tax authorities.
For companies with international operations, this makes accurate recordkeeping and clear financial reporting increasingly important. Businesses should ensure that their accounting records, ownership information and supporting documents are complete and consistent.
What UAE Businesses Should Do Now
Companies involved in international transactions should review their tax compliance procedures and supplier verification processes. They should also check whether their corporate structure or financial activities create additional reporting responsibilities under CRS, CARF or DMTT rules.
Maintaining accurate accounting and bookkeeping records, reviewing related-party transactions and preparing reliable financial reports can help businesses respond to tax requirements. Companies should also review their VAT claims and keep supporting documents available for possible checks.
Ignoring these responsibilities can lead to incorrect tax filings, rejected input VAT claims and additional compliance costs.
How Dubai Business and Tax Advisors Can Help
As UAE tax requirements develop, businesses need reliable support to manage their financial and tax responsibilities.
Dubai Business and Tax Advisors (DBTA) provides VAT advisory, corporate tax advisory, transfer pricing, tax compliance, accounting and bookkeeping, audit support and due diligence services. Its ACCA-qualified team helps businesses maintain accurate records, review tax obligations and improve financial reporting.
For companies involved in cross-border activities, proper tax planning and organised documentation are important for managing compliance risks and supporting business decisions.
The UAE’s latest international cooperation developments show the growing importance of transparent financial information and accurate tax records. Businesses should review their current processes and prepare for the reporting and verification requirements that apply to their activities.
