The Ministry of Finance (MoF) has released two Ministerial Decisions (MD) clarifying the scope and timelines for implementation of E-invoicing regime in the UAE. These decisions represent key steps in the UAE’s digital transformation journey enhancing efficiency and transparency in compliances.
The key aspects of the Ministerial Decisions are summarized below:
1. Scope of Applicability
- Any person conducting business in the UAE in respect of every business transaction
- Business-to-consumer transactions (B2C) are excluded – entities engaged exclusively in B2C are not subject to E-invoicing, until further notice from the Ministry
- Recipient may issue E-invoice or E-credit note on behalf of the issuer if both are VAT registered (as per the conditions prescribed in the VAT Executive Regulation or determined by the Minister)
2. Date of Implementation of E-invoicing regime
- Roll-out in phased manner, Pilot Programme to commence on 1 July 2026
- Mandatory Implementation based on revenue, as under:
- Large businesses with revenue* AED 50 million or more – Appointment of Accredited Service Provider (ASP) by 31 July 2026 and implementation by 1 January 2027
- Other cases (revenue* less than AED 50 million) – Appointment of ASP by 31 March 2027 and implementation by 1 July 2027
- Government Entities – Appointment of ASP by 31 March 2027 and implementation by 1 October 2027
- Any person may implement E-invoicing on a voluntary basis from 1 July 2026
*Revenue – Gross income earned during the most recent Accounting Period based on the Financial Statements (FS) prepared or based on other documentation acceptable to the Authority (if FS not prepared)
3. Business Transactions Excluded
- Any business transactions conducted by the Government Entities in sovereign capacity
- International passenger transportation services provided by an Airline via an Aircraft, where an electronic ticket is issued to the passengers
- Any services provided directly to the passengers by an Airline, that are ancillary to the services above, where an electronic miscellaneous document is issued for such services
- International goods transportation services provided by an Airline, where an airway bill is issued (this exclusion shall apply only for a period of 24 months)
- Financial services exempt from VAT or subject to VAT at the zero rate
4. Permissible Circumstances for Issuance of E-Credit Note
- Cancellation of business transaction
- Agreed consideration for business transaction is reduced for any reason
- Consideration for business transaction is returned in full or in part
- Administrative or numerical error has occurred
5. Timeline for Issuance of E-Invoice and E-Credit Note
- VAT registered supplier – within the timeline prescribed under the UAE VAT legislation
- Other cases – 14 days
- Issuer and recipient to report E-invoice and E-credit note within the timeline prescribed by the Minister
6. Other Compliances
- All electronic invoices, credit notes and any associated data is required to be stored in the UAE as per the timelines prescribed under the UAE Tax Procedures Law
- Issuer and recipient required to notify the Authority of any system failure within 2 business days from the date of occurrence of the failure, in prescribed mechanism
Considering these developments, it is imperative for the businesses to assess the requirements, initiate dialogue with the service providers and commence preparation for the E-invoicing implementation in a timely manner.
Click to download a copy of the Ministerial Decisions No.- 243
Click to download a copy of the Ministerial Decisions No.- 244