The UAE Ministry of Finance and the Federal Tax Authority have made substantial changes in federal taxes that include extending corporate tax relief to smaller firms as well as the creation of a uniform minimum price base for e-cigarettes all over the country.
Made under Ministerial Decision No. 131 of 2026, the federal government has extended Small Business Relief for a period of three years and applies to any tax periods ending on or before December 31, 2029. The small businesses that qualify to receive Small Business Relief according to the newly issued regulations and who earn up to AED 3 million ($816,880) per year are considered to be not liable for corporate tax purposes.
The extension provides essential operational certainty and reduced reporting burdens for domestic startups, small businesses, and growing enterprises as the UAE continues to mature its broader tax landscape.
In a parallel regulatory decision, Cabinet Decision No. 137 of 2026 introduces a mandatory minimum excise price of AED 1 ($0.27) per milliliter on all liquids used in electronic smoking devices and tools, taking effect on September 1, 2026. While electronic smoking liquids have been subject to a standard 100 percent excise tax rate since late 2019, the new minimum price baseline ensures that the taxable base cannot fall below AED 1 per milliliter regardless of existing wholesale or retail valuations. Under this formula, a standard 60-milliliter bottle carries a minimum taxable base of AED 60, upon which the 100 percent excise rate is applied.
Ministry officials noted that the revised excise framework aligns electronic smoking products with long-standing minimum price rules governing traditional cigarettes and waterpipe tobacco. The policy aims to bolster tax enforcement consistency, eliminate valuation practices that undermine revenue collection, and reinforce public health efforts designed to reduce the consumption of harmful goods. Importers, manufacturers, and retailers operating across the UAE are advised to adjust their product catalog pricing and internal systems ahead of the September deadline.
Together, these measures reflect the UAE’s strategic approach to economic governance, balancing targeted tax relief to spur small business growth with robust regulatory controls to maintain transparent fiscal operations nationwide.
