E-Invoicing in UAE: Everything You Need to Know Ahead of the 2026 Launch:
The UAE is set to implement mandatory e-invoicing for all businesses by 2026, revolutionizing the way companies handle invoicing, VAT, and compliance. In this post, I’ll cover the key details about what e-invoicing will mean for your business, the timeline for implementation, and practical steps you can take now to ensure a smooth transition. Don’t wait until the last minute—get ahead of the curve and start preparing today!
Introduction
In July 2023, the UAE Ministry of Finance (MoF) announced a series of transformative initiatives, one of which focuses on the development of a sophisticated billing system at the federal level, known as the “E-Billing System” or more commonly, “e-invoicing.” To provide businesses with more details on this shift, the MoF has launched a dedicated webpage outlining the e-invoicing framework, offering insights into its phased rollout across the UAE, which is set to begin in Q2 2026. Additionally, the Ministry has published a set of FAQs to clarify key elements of the proposed e-invoicing system (link).
In preparation for these changes, the UAE has laid the legal foundation through Federal Decree-Law No. 16 of 2024, which amends the UAE VAT Law and establishes e-invoices as legally valid documents for both issuance and input tax recovery (effective November 1, 2024). Moreover, the MoF has also introduced Federal Decree-Law No. 17 of 2024, which revises certain provisions of Federal Decree-Law No. 28 of 2022 related to tax procedures.
Objectives and key benefits of the e-invoicing system
Digitalize tax compliance
Enhance operational efficiency
Increase tax transparency
Contribute to sustainability
Automated VAT compliance
Cost efficiency
Faster payment cycles
Global compatibility
Data-driven decision making
Simplified compliance and reporting
What is e-invoicing?
E-invoicing involves the digital exchange of invoices between suppliers and buyers in a standardized format that enables automatic processing by a company’s IT systems. Unlike traditional invoices (such as PDFs, Word documents, or scanned images), e-invoices are generated, transmitted, and received in a machine-readable format (e.g., XML, as specified by the MoF). This ensures greater accuracy, compliance, and efficiency in the reporting of VAT transactions.
How the UAE E-Invoicing System Works?
The UAE’s e-invoicing system will follow the PEPPOL “5-Corner” Decentralized model (as illustrated in the diagram below), with the Ministry of Finance (MoF) / Federal Tax Authority (FTA) positioned in Corner 5 to collect and store the e-invoices. As part of the e-invoicing framework, it will be mandatory for businesses to work with an Accredited Service Provider (ASP), which is a technology vendor approved by the UAE MoF. Direct access to the UAE’s e-invoicing infrastructure will be provided solely to ASPs, not to individual taxpayers—unless a business chooses to become an ASP itself. However, this route could be expensive and impractical for most companies.
It is important to note that each member of a VAT group in the UAE must establish a separate endpoint connection with the ASP, although they will continue to use the group’s Tax Registration Number (TRN).
Here’s a visual overview of the 5-corner model
Key Steps:
Supplier generates the invoice
Validation by ASP
Invoice transmission
Reporting to FTA
Buyer receives the invoice
Which Taxpayers and Transactions Are Subject to E-Invoicing in the UAE?
Who is Affected?
The e-invoicing system will apply to all taxpayers who are required to issue invoices under the UAE VAT law. This includes businesses of various sizes, although larger taxpayers are expected to be the first to implement e-invoicing in the early phases. Smaller businesses are likely to join in subsequent phases, with specific thresholds, possibly based on annual turnover, determining the timeline for their inclusion.
VAT groups will also need to comply with the new system, with each member of the group required to have a separate connection to an Accredited Service Provider (ASP), while using the group’s Tax Registration Number (TRN) to ensure all transactions are captured under the e-invoicing framework.
What Transactions Are Covered?
Domestic Transactions
Initially, the e-invoicing system will apply to business-to business (B2B) and business-to-government (B2G) transactions. While business-to-consumer (B2C) transactions are expected to be included in the future, they are not part of the scope at this stage. For B2B transactions, the Tax Identification Number (TIN), which consists of the first 10 digits of the Tax Registration Number (TRN), will serve as the business identifier. Therefore, B2B transactions will be within the scope of the e-invoicing system, regardless of whether the businesses involved are VAT- or Corporate Tax registered, as long as they are dealing with business customers who have a TIN.
Export Transactions
Transactions with international customers will also fall under the e-invoicing framework. However, overseas customers are not required to register with a UAE Accredited Service Provider (ASP) unless they are obligated to apply for VAT or Corporate Tax registration in the UAE. For international customers already connected to the PEPPOL network in their home country, their PEPPOL address can be used for UAE einvoicing purposes. For those who are not part of the PEPPOL network, UAE businesses will continue to send invoices via email, typically in PDF format, as is the current practice.
The Ministry of Finance (MoF) will provide further updates and guidance regarding which transactions and businesses
will be included in future phases of the e-invoicing system.
Timelines
While the exact details of the implementation phases are still to be finalized, based on our experience in other regions, it is anticipated that large taxpayers in the UAE will be the first to adopt the e-invoicing system as part of a pilot program (likely to begin once the Accredited Service Providers (ASPs) are in place). Afterward, other taxpayers will gradually be integrated into the system in phases to ensure a smooth transition and adequate support for all businesses.
Note: Certain legislative aspects have already been amended through Federal Decree-Laws No. 16 and 17 of 2024 to support the e-invoicing framework
Reparing for E-Invoicing in the UAE: Key VAT Law Amendments
With the introduction of e-invoicing in the UAE, Federal Decree-Law No. 16 of 2024 has amended the UAE VAT Law to incorporate mandatory electronic invoicing, effective from 30 October 2024.
The updates introduce key definitions for “Electronic Invoicing System,” “Electronic Invoices,” and “Electronic Credit Notes,” formally expanding “Tax Invoice” and “Tax Credit Note” to include digital formats. This is an important development as it lays the groundwork for a structured, automated invoicing process that aligns with the FTA’s digital compliance framework.
The amendments to Articles 55, 65, 70, and 76 reinforce the scope of e-invoicing and compliance. Article 55 adds a requirement to retain electronic invoices for input VAT recovery, ensuring digital proof of tax recovery for qualifying transactions. Articles 65 and 70 mandate that taxable persons must issue both tax invoices and credit notes electronically where applicable, in accordance with the ‘Electronic Invoicing System’, ensuring integration with FTA systems. Meanwhile, Article 76 introduces a penalty for failing to issue electronic invoices and credit notes within legally specified timelines.
Preparing for E-Invoicing in the UAE: Key VAT Law Amendments
With the introduction of e-invoicing in the UAE, Federal Decree-Law No. 16 of 2024 has amended the UAE VAT Law to mandate the use of electronic invoicing, effective from October 30, 2024.
The amendments introduce key definitions for terms such as “Electronic Invoicing System,” “Electronic Invoices,” and “Electronic Credit Notes,” formally extending the scope of “Tax Invoice” and “Tax Credit Note” to include digital formats. This development is crucial as it establishes the foundation for a structured, automated invoicing process in line with the Federal Tax Authority’s (FTA) digital compliance framework.
The revisions to Articles 55, 65, 70, and 76 emphasize the expanded scope of e-invoicing and strengthen compliance requirements. Article 55 now mandates the retention of electronic invoices for input VAT recovery, ensuring digital proof of tax recovery for eligible transactions. Articles 65 and 70 require taxable persons to issue tax invoices and credit notes electronically, where applicable, in line with the “Electronic Invoicing System,” ensuring integration with FTA systems. Article 76 introduces penalties for failing to issue electronic invoices and credit notes within the prescribed legal timelines.
Further more, Federal Decree-Law No. 17 of 2024 on tax procedures defines the “E-invoicing system” and grants the Ministry of Finance (MoF) the authority to issue the necessary regulations to implement the system, set its effective dates, and outline the requirements and entities subject to it.
To prepare for these changes, businesses should begin evaluating and upgrading their ERP and invoicing systems to ensure they are compatible with e-invoicing requirements.
Lessons Learned from KSA E-Invoicing
Saudi Arabia has already rolled out its e-invoicing system, providing valuable lessons for businesses in the UAE as they prepare for the upcoming transition. Here are some key takeaways from the KSA experience:
Early Preparation Is Key
Training for All Stakeholder
Training IT, finance, and tax teams on e-invoicing requirements is critical. In KSA, businesses that held regular training sessions and workshops were better equipped to manage compliance risks and fostered a higher level of
commitment to the einvoicing process.
Integration Challenges
Some companies in KSA encountered difficulties integrating their ERP systems with e-invoicing providers. UAE businesses should ensure that their ERP systems are compatible with e-invoicing solutions and offer flexibility for
integration with PEPPOL.
Post-Go-Live Support
Ongoing support and monitoring after the go-live date were essential for KSA businesses to address technical issues promptly and maintain compliance. UAE businesses should also plan for robust post implementation support.
How to Prepare for UAE E-Invoicing
To ensure your business is fully prepared for the UAE’s e-invoicing system, we recommend the following steps:
Start Early
The sooner you begin preparing, the smoother your transition will be—especially when it comes to integrating
your systems with service providers.
Assess Your Systems
Review your ERP and invoicing systems to check if they align with the e-invoicing standards. This should include
conducting VAT and IT health checks to ensure system compatibility.
Train Your Team
Make sure your staff— particularly those in IT, finance, legal, procurement, accounts receivable, and tax—are familiar with the new e-invoicing requirements and ready for the transition.
Engage with ASPs
Once the Ministry of Finance (MoF) releases the list of Accredited Service Providers (ASPs), identify and connect
with potential providers who can validate and transmit invoices to the FTA on your behalf.
How can we Help?
Our experts at SS&CO Global can assess your systems, implement solutions, and provide training on the new regulations. Contact our UAE VAT/Tax Technology team below to discuss your e-invoicing needs and how we can support your business through this digital transition.
