UAE Published E-Invoicing Guidelines
- 28.02.2026
- Posted by: Uwe Hohmann
- Categories: Compliance, Accounting, Dubai, Middle East
With the release of the UAE Electronic Invoicing Guidelines, the path to mandatory e-invoicing is now clear. Businesses of all sizes and industries across the UAE will need to change how they issue, receive, and report invoices.
Here is what you need to understand and, more importantly, what you need to do.
What Is Electronic Invoicing, and Why Is the UAE Introducing It?
Electronic invoicing (commonly referred to as e-invoicing) replaces traditional paper and PDF invoices with structured digital invoices in XML (Extensible Markup Language) format. These invoices are issued, transmitted, and received through a centralized Electronic Invoicing System overseen by the MoF (Ministry of Finance) and the FTA (Federal Tax Authority).
The initiative is part of the broader “We the UAE 2031” vision, specifically its Forward Ecosystem pillar, which emphasizes digital infrastructure and improved government performance. From a practical standpoint, the system is designed to strengthen VAT (Value Added Tax) compliance, reduce the tax gap, minimize manual data entry errors, and speed up payment cycles. The government provides near real-time visibility into business transactions. For businesses, it promises faster processing, fewer disputes, and eventually, pre-populated VAT returns.
The UAE has adopted the PEPPOL (Pan-European Public Procurement Online) framework as the backbone for its e-invoicing infrastructure, using what is known as the 5 Corner Model. This means every invoice flows through ASPs (Accredited Service Providers) who validate, transmit, and report the data on behalf of both the supplier and the buyer.
Who Is Required to Comply?
This is one of the most important points to understand: e-invoicing is mandatory for any person conducting business in the UAE, regardless of whether they are registered for VAT. The term “person” in this context covers both natural and legal persons, so sole proprietors, partnerships, limited liability companies, free zone entities, branches of foreign companies, and even government entities all fall within scope.
If your business carries out B2B (Business to Business), B2G (Business to Government), G2B (Government to Business), or G2G (Government to Government) transactions, you are in scope. The only transactions excluded from the requirement are those involving consumers who are not in business, meaning standard B2C (Business to Consumer) sales are not covered.
It is also worth noting that your customer’s e-invoicing status does not affect your own obligation. Even if your buyer has not yet onboarded to the system, you are still required to issue an electronic invoice. In such cases, the guidelines specify a predefined endpoint (0235: 9900000098) that the supplier must use on the electronic invoice.
What About Exclusions?
The MoF has confirmed a limited number of exclusions. These include sovereign activities carried out by government entities (provided they are not in competition with the private sector), certain international passenger transportation services provided by airlines where electronic tickets or airway bills are issued, and VAT-exempt financial services as defined under Article 42 of the VAT Executive Regulation.
The Minister may also introduce additional exclusions through future Ministerial Decisions. However, businesses should not assume they are excluded without verifying their status against the published legislation.
The Implementation Timeline: Key Dates to Watch
E-invoicing will roll out in phases, and the deadlines depend on revenue thresholds and entity type.
Voluntary Adoption (from 01.07.2026): Any business, regardless of revenue, can choose to adopt e-invoicing voluntarily from this date. No penalties apply during the voluntary period, which makes it an ideal window for testing and familiarization.
Mandatory Phase 1 (by 01.01.2027): Businesses with annual revenue of AED 50,000,000 or more must have appointed an ASP by 31.07.2026 and must go live with e-invoicing by 01.01.2027.
Mandatory Phase 2 (by 01.07.2027): Businesses with annual revenue below AED 50,000,000 must have appointed an ASP by 31.03.2027 and must go live by 01.07.2027.
Government Entities (by 01.10.2027): All government entities must appoint an ASP by 31.03.2027 and go live by 01.10.2027.
These deadlines are not flexible. Missing them can result in administrative and e-invoicing specific penalties under CD No. 106 of 2025 (Cabinet Decision No. 106 of 2025 on Violations and Administrative Penalties Resulting from Violation of the Legislation Regulating the Electronic Invoicing System).
Your TIN Is Your Identifier
Your Participant Identifier on the Peppol network will be based on your TIN (Tax Identification Number). If you are already registered with the FTA for any tax type, your TIN is simply the first 10 digits of your TRN (Tax Registration Number). If you are not registered for any tax but fall within the scope of e-invoicing, you will need to register with the FTA to obtain a TIN.
An important detail for businesses operating within a Tax Group: each member uses its own TIN (the first 10 digits of its own TRN), not the representative member’s TIN. Each Tax Group member also needs to onboard separately with an ASP, and different members may choose different ASPs.
Tax Groups and the Grace Period for Intra-Group Transactions
The guidelines confirm that transactions between members of the same VAT group are within scope and are not automatically excluded. However, the MoF and FTA have acknowledged that intra-group transactions often involve complex internal pricing, centralised accounting systems, and high transaction volumes.
To allow for adequate preparation, a temporary grace period of 24 months has been introduced, starting from 01.01.2027. During this window, businesses within a Tax Group will not be required to apply e-invoicing obligations to transactions between group members. Once the grace period ends, full compliance will be required.
Preparing Your Business: The Four Steps
The guidelines outline a clear four-step process to get ready.
Step 1 is understanding the requirements. Review the relevant legislation, including MD No. 243 of 2025 (Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System) and MD No. 244 of 2025 (Ministerial Decision No. 244 of 2025 on the Implementation of the Electronic Invoicing System). Identify which of your transactions are in scope, assess the data fields your invoices will need to include, and determine whether your accounting or ERP (Enterprise Resource Planning) system can generate and export the required data.
Step 2 is selecting and onboarding with an ASP. Choose an ASP, finalise your contractual obligations, and initiate the onboarding process through EmaraTax. Your ASP will issue you a Peppol Participant Identifier once onboarding is complete.
Step 3 is testing. Work with your ASP to test the full cycle of invoice exchange and reporting. This includes transmitting invoice data to your ASP, receiving invoices from suppliers via your ASP, and confirming that tax data has been successfully reported to the FTA.
Step 4 is going live. Establish a governance model with your ASP for error resolution, commence the exchange and reporting of electronic invoices, and monitor for any issues during the initial period.
After go-live, ongoing management is essential. If your circumstances change (for example, if you register for VAT, join or leave a Tax Group, or close down the business), you must update your ASP promptly through the reverification or offboarding process in EmaraTax.
Key Technical Points for Electronic Invoices
Electronic invoices in the UAE will be issued in XML format. They will not feature QR codes or barcodes. The specific data requirements for each invoice type are set out in Peppol’s PINT-AE (Peppol International format customised for the UAE) billing specifications.
There are six categories of electronic invoices: electronic tax invoices, self-billed electronic tax invoices, electronic tax credit notes, self-billed electronic tax credit notes, commercial invoices, and electronic credit notes. The correct category depends on the nature of the transaction and whether the supplier or buyer is issuing the document.
VAT amounts and total amounts payable must always be stated in AED, even if the invoice is denominated in a foreign currency. Where the document currency is not AED, the supplier must convert the gross total payable using the Central Bank approved exchange rate and include it in the designated field.
Data Retention Rules
Records relating to e-invoices must be retained for 5 years following the relevant tax period for taxable persons, 5 years from the end of the calendar year in which the document was created for non-taxable persons, and 7 years for real estate records. Additional retention periods apply in cases of disputes, audits, or voluntary disclosures.
While the legislation states that e-invoices and associated data must be stored “within the State,” the guidelines clarify that this means the data must be retrievable and reproducible by the FTA on request, regardless of where the servers or cloud infrastructure are physically located.
Penalties
Failing to comply with e-invoicing obligations can attract two types of penalties. Administrative penalties apply where tax invoicing obligations under the VAT Decree-Law are not met. E-invoicing specific penalties apply for failures to meet the obligations under the Electronic Invoicing System. The specific penalty amounts are outlined in CD No. 106 of 2025.
Importantly, penalties will not apply for violations related to invoices issued voluntarily before the mandatory implementation date for a given business. This means the voluntary period genuinely offers a risk-free window to adopt the system early.
Comprehensive UAE Business Solutions
At TME Services, we are already working with businesses across the UAE to prepare for e-invoicing compliance. From reviewing your current invoicing processes and identifying the required data fields to assisting with ASP selection and coordinating with your accounting team on readiness, we provide end-to-end support tailored to your business.
If you are not yet registered with the FTA and need to obtain a TIN, we can handle that process for you. If you are part of a Tax Group and need clarity on how the grace period applies to your intra-group transactions, we can advise on that too.
Our comprehensive services are designed to support you every step of your business journey in the UAE:
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