Dubai Changes in Jan 2026 mark a significant shift in the regulatory and lifestyle landscape of Dubai. A series of confirmed policy updates is now in effect, reshaping how businesses operate, how residents plan their daily routines, and how investors assess long-term opportunities across the emirate and the wider UAE.
Below is a practical breakdown of the most important changes now live as of early 2026.
- Tax and finance reforms now in force
- New sugar-based excise tax model
- Single-use plastic ban enters final phase
- Education and Friday schedule changes
- Travel and digital banking updates
- Property and real estate developments
- Employment and Emiratisation updates
- Legal and professional compliance changes
- E-invoicing rollout begins mid-2026
- 2026 declared the “Year of the Family”
- Key takeaways
- Frequently asked questions
Tax and finance reforms now in force
Several major tax and regulatory updates came into effect on January 1, 2026, with direct implications for businesses, investors, and finance teams.
VAT refund deadlines and compliance changes
From January 1, 2026, the UAE has introduced a five-year time limit for claiming refundable VAT credits, including input VAT and unused credit balances. This deadline applies to tax periods ending on or after that date.
For VAT credit balances accumulated before 2026, businesses have a one-year transitional window to submit claims. Any outstanding legacy refunds must be filed by 31 December 2026, after which unclaimed balances will lapse permanently.
The reverse-charge mechanism has also been simplified. Businesses are no longer required to issue self-invoices for imports under reverse charge, provided they maintain adequate supporting records and transaction documentation.
Expanded audit powers and input tax restrictions
The Federal Tax Authority has expanded its audit and enforcement powers. In cases involving suspected tax evasion, the FTA may conduct extended look-back audits and deny input tax recovery if a transaction is linked to tax evasion, even where the recipient was not directly involved.
These changes place greater emphasis on supplier due diligence and robust record-keeping across all VAT-registered entities.
New sugar-based excise tax model
Public health policy has taken a more targeted approach in 2026 with the introduction of a volumetric sugar tax.
From January 1, 2026, the UAE replaced the previous flat 50 per cent excise duty on sweetened beverages with a tiered model based on sugar content per 100 ml:
- High sugar (≥8g): AED 1.09 per litre
- Moderate sugar (5g to <8g): AED 0.79 per litre
- Low sugar (<5g) or artificially sweetened only: 0 excise tax
The aim is to encourage reformulation, reduce sugar consumption, and align the UAE with international public health frameworks.
Single-use plastic ban enters final phase
Dubai and the wider UAE moved into the final phase of the single-use plastic ban in 2026, expanding restrictions beyond earlier measures targeting plastic bags.
The manufacture, import, and trade of the following items are now prohibited:
- Plastic beverage cups and lids
- Plastic cutlery, including chopsticks
- Plastic plates and straws
- Food containers made from Styrofoam (EPS)
Items manufactured locally using recycled materials or approved plant-based alternatives, such as PLA, are generally exempt, supporting circular economy and local production goals.
Penalties start at AED 2,000 for a first offence and can reach AED 10,000 for repeated violations within the same year.
Education and Friday schedule changes
Several confirmed education changes in Dubai will affect school routines and weekly schedules for families in 2026.
Unified Friday prayer time
From January 2, 2026, all mosques across the UAE will hold Friday sermons and prayers at a standardised time of 12:45 pm, creating nationwide consistency for work, school, and public scheduling.
Early school dismissal on Fridays
Effective January 9, 2026, private schools in Dubai must dismiss students by 11:30 am on Fridays.
Older students, typically from Grade 6 (Year 7) onwards, may be permitted to continue learning online on Fridays, subject to KHDA approval and individual school policies.
Travel and digital banking updates
Infrastructure and financial systems are expected to continue moving toward fully digital experiences in 2026.
Dubai International Airport has expanded its use of smart gates and biometric corridors, particularly in Terminal 3. Eligible passengers can now complete immigration procedures using facial recognition, enabling faster and more seamless arrivals.
At the same time, UAE banks have begun phasing out SMS- and email-based one-time passwords. From January 2026, most online banking and card transactions require authentication through bank mobile apps using push notifications, biometrics, or smart pass systems.
Property and real estate developments
Digital transformation continues to reshape Dubai’s property market in 2026.
Dubai has introduced Yubi Mortgage, the UAE’s first fully digital home loan platform. The system allows buyers to compare mortgage offers from more than 25 lenders through a single interface, simplifying applications, approvals, and documentation.
For residents and investors, this increases transparency and accessibility in the mortgage market, particularly for first-time buyers and overseas purchasers.
Employment and Emiratisation updates
From January 1, 2026, the minimum private-sector wage for UAE nationals has been set at AED 6,000 per month.
Private companies that fail to comply may face penalties, restrictions on work permits, and negative impacts on Emiratisation quota compliance.
Legal and professional compliance changes in Dubai (2026)
Dubai Law No. 17 of 2025, now in effect, updates the framework governing lost and abandoned property. The law formalises procedures for reporting, storing, and claiming found items and applies to both individuals and businesses.
Failure to comply may result in fines of up to AED 200,000, depending on the severity of the violation.
Separately, content creators and influencers posting paid or promotional material must hold a valid Advertiser Permit issued by the UAE Media Council by January 31, 2026.
E-invoicing rollout begins mid-2026
The UAE’s mandatory e-invoicing regime begins its phased rollout in mid-2026, starting with large VAT-registered businesses.
Companies will be required to issue, transmit, and archive invoices in structured electronic formats via accredited service providers, with broader adoption expected through 2027.
2026 declared the “Year of the Family”
The UAE has officially designated 2026 as the Year of the Family, highlighting family wellbeing, social cohesion, and community stability as national priorities.
This year’s UAE theme reinforces alignment across education, work schedules, and community planning, supporting long-term quality-of-life goals for residents.
Key takeaways
January 2026 introduces a dense set of confirmed regulatory changes across tax, finance, employment, and compliance, requiring businesses to tighten documentation, meet new VAT deadlines, and prepare for mandatory e-invoicing in Dubai.
Digital systems are now the default, with biometric airport travel expanding, SMS-based banking authentication being phased out, and fully digital mortgage platforms simplifying property finance.
Sustainability and public health measures advance through the final phase of the single-use plastic ban and the introduction of sugar-based excise taxes.
Frequently asked questions
The five-year limit applies to tax periods ending on or after January 1, 2026. Historical VAT credits must be claimed by December 31, 2026.
Plastic cups and lids, cutlery, plates, straws, and Styrofoam food containers are now prohibited.
Anyone receiving payment or gifts for promotional content must obtain a permit by January 31, 2026.
Private companies must pay Emirati employees at least AED 6,000 per month or risk penalties and Emiratisation compliance issues.
Yubi Mortgage allows buyers to compare and apply for home loans digitally across multiple lenders, reducing paperwork and processing time.
