On 29 September 2025, the UAE Ministry of Finance published two decisions regarding the implementation of the Electronic Invoicing System for business transactions. All VAT-registered businesses must transition to e-invoicing in a phased rollout over the 2026–2027 period. These changes aim to modernize the system for monitoring VAT compliance in the UAE.
- Mandatory e‑invoicing for all VAT-registered businesses in the UAE, phased rollout across 2026–2027.
- B2B and B2G scope: e‑invoicing required for business and government transactions; B2C excluded for now.
- Structured electronic invoices and credit notes must include seller/buyer VAT IDs, descriptions, quantities, AED amounts, and required particulars.
- 14‑day rule: e‑invoices and e‑credit notes must be issued and transmitted within 14 days of the transaction date.
- Accredited Service Providers (ASP) must be appointed by sellers and buyers from the Ministry of Finance list to exchange e‑invoices.
- Data residency and access: all e‑invoice data stored in the UAE; the FTA has real‑time access and may share data with authorities.
Scope of Application
E-invoicing rules will apply to all business entities that are taxpayers for VAT in the UAE. These entities will be required to issue tax invoices in the electronic format for every taxable transaction they carry out.
Certain transactions are excluded from the scope of e-invoicing, specifically:
- Transactions by government entities conducted within the scope of their sovereign powers without competing with the private sector;
- International passenger air transportation, including the issuance of electronic tickets and related passenger services;
- International air transportation of goods for which an airway bill is issued (this exclusion is temporary);
- Financial services that are either exempt from VAT or subject to the zero rate;
- Other operations that the Minister may determine.
For the time being, the EIS will not be applied to B2C transactions (i.e., sales to private, non-business consumers). Consequently, e-invoicing will only be mandatory for B2B (business-to-business) or B2G (business-to-government) dealings.
Electronic Invoicing in the UAE
The e-invoicing system is designed for the issuance, transmission, and exchange of tax invoice and credit note data in an electronic (structured, machine-readable) format.
The issuer must issue and transmit an electronic invoice to the recipient for every commercial transaction. The invoice must contain details of the seller and the buyer, including their VAT registration numbers, a description of the goods and services, their unit price, quantity, the amount payable in AED, the tax rate, and other mandatory particulars specified in Article 59 of the Executive Regulation to the Federal Decree-Law No. 8 of 2017 on Value Added Tax.
In contrast to an invoice, an electronic credit note is issued in cases of:
- Cancellation of a business transaction;
- Reduction of the agreed consideration;
- Full or partial return of the consideration;
- Error in the business transaction data.
The electronic invoice or credit note must be issued and sent to the recipient via the e-invoicing system within 14 days of the business transaction date.
Appointment of an Accredited Service Provider
To issue and/or receive electronic invoices and credit notes through the e-invoicing system, companies must select an Accredited Service Provider (ASP) from the list approved by the UAE Ministry of Finance. Both sellers and buyers must appoint their own ASP.
An ASP is an accredited entity responsible for the technical delivery of e-invoicing services to businesses. To operate, it must comply with a range of legal and technological criteria as set out in Ministerial Decision No. 64 of 2025.
Data Storage and Access
All data from e-invoices and e-credit notes must be stored within the UAE.
The Federal Tax Authority (FTA) is granted real-time access to all data flowing through the Electronic Invoicing System. The FTA may also share this data with other UAE government departments or with foreign authorities under international treaties.
Implementation Timeline for E-invoicing in the UAE
The mandatory electronic invoicing system will be introduced according to the following schedule:
| Category | Implementation Deadlines |
|---|---|
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Companies with revenue of AED 50 million or more (approx. USD 13.6 million) |
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Companies with revenue less than AED 50 million |
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Government entities |
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Also, starting from 1 July 2026, any person may voluntarily implement the Electronic Invoicing System, including through participation in a pilot program.
Conclusion
Over the next two years, VAT-registered companies in the UAE must switch to the mandatory electronic format for tax invoices. To meet the deadlines and ensure correct VAT compliance in their business operations, companies should begin planning the implementation of e-invoicing now. This involves adapting their existing systems to support electronic invoices and choosing an Accredited Service Provider (ASP).
