The Ministry of Finance announced the issuance of two Ministerial Decisions clarifying the scope of obligations and the timelines for implementing the Electronic Invoicing System in the United Arab Emirates. These decisions represent fundamental steps in the UAE’s digital transformation journey and in enhancing efficiency, transparency, and compliance in business transactions across the country. Scope of Obligations The first decision on the scope of the Electronic Invoicing System clarifies that the system applies to all persons conducting business in the UAE in relation to all business-to-business (B2B) and business-to-government (B2G) transactions, except in cases where specific exclusions have been identified. Notwithstanding such exclusions, businesses may voluntarily issue, send, share, exchange, and report electronic invoices and electronic credit notes. In accordance with the decision, and to ensure smooth implementation, issuers and recipients of invoices are required to appoint an Accredited Service Provider (ASP), and the Ministry will publish a list of accredited service providers in due course. Under the new requirements, an electronic invoice must be issued and transmitted for every business transaction. An electronic credit note must also be issued in cases where a transaction is cancelled, the agreed consideration is reduced, a refund is made in full or in part, or where an administrative or numerical error has occurred. Recipients are required to process all electronic invoices and electronic credit notes through the Electronic Invoicing System. Both the issuer and the recipient must fulfil their obligations under this decision through the Accredited Service Provider that they have appointed. Electronic invoices and electronic credit notes must also contain all the required data fields and particulars as prescribed by the Ministry of Finance. The new system is based on the international OpenPeppol standard, which is a globally recognised framework for the exchange of electronic documents. By adopting Peppol, the UAE ensures interoperability with international business communities, facilitates cross-border trade, reduces administrative costs, and enhances compliance efficiency. Peppol also enhances security, ensures data integrity, and enables faster and more accurate exchange of invoices between businesses and government entities. Timelines The second Ministerial Decision on the timelines for the implementation of the Electronic Invoicing System clarifies that the Pilot Programme will commence on 1 July 2026 with a selected group of taxpayers. After the completion of the Pilot, mandatory implementation will be introduced in phases. Businesses with annual revenue equal to or exceeding AED 50,000,000 must appoint an Accredited Service Provider by 31 July 2026 and implement the Electronic Invoicing System as of 1 January 2027. Businesses with annual revenue below AED 50,000,000 must appoint an Accredited Service Provider by 31 March 2027 and implement the system as of 1 July 2027. Every in scope government entity must also appoint an Accredited Service Provider by 31 March 2027 and implement the Electronic Invoicing System as of 1 October 2027. This phased approach aims to support businesses in transitioning gradually and smoothly to the new system, while ensuring compliance with the legal framework. These two decisions reflect the UAE’s commitment to adopting international best practice, enhancing ease of doing business, and supporting the country’s transition to a fully digital economy.
