The UAE was previously renowned for having almost no federal taxes; this changed in 2017 with the introduction of excise tax, followed by the value-added tax (VAT) in 2018, and corporate income tax in 2023. Now, through the Ministerial Decision No. 243 of 2025 and Ministerial Decision No. 244 of 2025, VAT-registered businesses in the UAE are required to move to electronic invoicing (e-invoicing).
To implement this, the UAE is taking a phased approach, with voluntary adoption starting from 1 July 2026 and mandatory implementation for large businesses (those with annual revenue above AED 50 million) from 1 January 2027.
The Federal Tax Authority (FTA) is the competent authority overseeing the implementation of the e-invoicing framework, and additional technical specifications, guidance and compliance expectations may be issued from time to time.
From a governance and compliance perspective, e-invoicing forms part of the UAE’s broader tax transparency and regulatory oversight framework. The initial focus is on business-to-business (B2B) and business-to-government (B2G) transactions. Business-to-consumer (B2C) invoices are currently out of scope of the mandate until a later phase is announced.
In this article, we discuss:
- What is e-invoicing?
- Why is the UAE implementing e-invoicing?
- The UAE’s e-invoicing model and framework
- Timeline and phased roll-out for UAE e-invoicing
- What does this mean for UAE VAT-registered businesses?
- How we can help
- FAQs about e-invoicing in the UAE
What is e-invoicing?
If you have been using Portable Document Formats (PDFs) or paper invoices as your main invoicing method, e-invoicing is quite different. E-invoicing is the process of issuing, transmitting and receiving invoices in a structured data format via an accredited platform.
The use of structured data formats enables automated validation, enhanced audit trails and more effective regulatory monitoring, with direct implications for internal control effectiveness and compliance assurance.
This means your invoicing process will become less manual and more standardised. E-invoices will be sent to your buyer and shared with the FTA near real time. Under the UAE’s approach, invoices that come in the form of PDFs, Word documents, scanned copies, images or emails will not be treated as e-invoices.
Businesses that continue to rely on legacy invoicing formats beyond the applicable mandate dates may face operational disruption, compliance risk and potential regulatory exposure.
Why is the UAE implementing e-invoicing?
From a policy perspective, the UAE’s move to e-invoicing is driven by a combination of objectives. With e-invoicing, the FTA will receive invoice data almost instantly. This is expected to improve audit transparency and strengthen VAT compliance.
The UAE has also been positioning itself as a leading digital economy. Moving VAT invoicing into a real-time, data-driven environment fits squarely with that vision and will reduce companies’ reliance on paper-based manual processes.
At the same time, the shift to e-invoicing allows the UAE to stay on par with global best practices in tax administration and automation. The country adopts an internationally recognised standard through the Peppol framework, which can add to the ease of doing business for companies operating in multiple jurisdictions.
This is particularly important given the country’s role as a regional and international trading hub. Many jurisdictions with VAT or goods and services tax (GST), such as Singapore, have either announced or implemented mandatory e-invoicing.
From a risk management perspective, e-invoicing also supports the reduction of tax evasion and fraud risk, enhances transaction traceability and promotes consistent application of VAT rules across the economy.
The UAE’s e-invoicing model and framework
The architecture the UAE is adopting is known as the Decentralised Continuous Transaction Control and Exchange (DCTCE), implemented using a “five-corner” model. If you’re familiar with e-invoicing in Europe, you may know the four-corner model: supplier, supplier’s service provider, buyer’s service provider and buyer.
The UAE adds a fifth corner: the FTA. Here is how this works in practice:
- As the supplier, you will start by issuing an invoice through your chosen Accredited Service Provider (ASP).
- Your ASP will validate the invoice against the UAE e-invoicing schema, then transmit it to your buyer’s ASP.
- At the same time, your ASP will report the tax data to the FTA.
- Your buyer’s ASP will receive and validate the invoice, then deliver it into your buyer’s system in the required format.
- Your buyer’s ASP will also relay the tax data to the FTA, confirming the transaction from the buyer’s side.
Notwithstanding the use of an ASP, businesses remain fully accountable for the accuracy, completeness and timeliness of invoice data submitted to the FTA and must retain appropriate oversight and governance over outsourced e-invoicing arrangements.
Two points are worth emphasising. First, this is a decentralised model. You will not need to log into a single government portal to manually upload every invoice. Instead, you can work with an accredited provider, which in turn manages the e-invoicing process with other providers and to the FTA.
Second, while the FTA receives the data, the authority will not pre-approve each invoice before it reaches your buyer. That means minimal disruption to your commercial flows once you have made the transition to e-invoicing.
From a governance perspective, the appointment of an ASP introduces third-party risk considerations, requiring appropriate due diligence, contractual safeguards and ongoing performance monitoring.
Timeline and phased roll-out for UAE e-invoicing
The UAE has specified the dates that companies need to adhere to and implement e-invoicing. This will take place in the following phases:
| Phase | Category of taxpayer | Annual revenue | Deadline to appoint ASP | Mandatory e-invoicing from |
|---|---|---|---|---|
| Pilot programme | Selected businesses (Taxpayer Working Group) | N/A | N/A | 1 July 2026 |
| Voluntary adoption | Any business | N/A | N/A | 1 July 2026 |
| Phase 1 | Large businesses | Above AED 50 million | 31 July 2026 | 1 January 2027 |
| Phase 2 | Other businesses | Below AED 50 million | 31 March 2027 | 1 July 2027 |
| Government entities | N/A | 31 March 2027 | 1 October 2027 |
After these dates, issuing in-scope invoices outside the e-invoicing system may result in penalties, VAT reporting inaccuracies and adverse audit findings.
UAE e-invoicing exclusion list
- Sovereign activities carried out by government entities that do not compete with the private sector
- Certain international passenger and goods transportation services by airlines
- Financial services that are VAT-exempt or zero-rated
Businesses should note that exclusions may be reviewed or amended by the FTA, particularly for entities carrying out mixed or evolving activities, and ongoing monitoring of regulatory guidance will be required.
What does this mean for UAE VAT-registered businesses?
As this new requirement will affect many VAT-registered businesses, you will first need to know which phase you fall into based on your annual revenue and activities. If you are a large business with more than AED 50 million of revenue, take note you are in Phase 1 with the January 2027 deadline. If you are below that threshold, you are in Phase 2 with the July 2027 start date.
Next, conduct a gap analysis on your existing enterprise resource planning (ERP) or accounting software. Review how your current processes and systems compare against the requirements of the new UAE e-invoicing framework.
From this, you can be more informed and select a suitable ASP to partner with. Large groups may also have to think about harmonising providers across multiple entities and coordinating with overseas finance and information technology (IT) policies.
Once you have a provider, you can move on to the more detailed work of integration and testing. Verify that your tax invoice templates contain the following mandatory fields:
- Title “Tax Invoice” clearly shown
- Supplier details: Legal name, full address, supplier transaction reference number (TRN)
- Customer details: Legal name, Address, Customer TRN (mandatory only if customer is VAT registered)
- Unique tax invoice Number (sequential, non-duplicative)
- Invoice date
- Supply date (if different from invoice date)
- Clear description of goods/services
- Quantity or period of service (where applicable)
- Unit price (before VAT)
- Net amount before VAT
- VAT rate applied (e.g., 5%, 0%)
- VAT amount charged
- Gross amount including VAT
- Currency used (if not AED, VAT must still be shown in AED)
Appropriate controls should be implemented to ensure the accuracy, completeness and consistency of invoice data at source, including validation checks and defined exception-handling procedures.
To avoid non-compliance, your finance team will need to be trained on the new issuance and validation workflow. You may also implement secure electronic storage and structured recordkeeping for your e-invoice data. Internal policies, procedures and control frameworks should be updated to reflect e-invoicing workflows, including segregation of duties, access controls, incident management and retention of electronic audit trails.
How we can help
As e-invoicing becomes the next vital compliance requirement in the UAE, we will continue to monitor any developments from the FTA and keep our clients informed. In the meantime, our Dubai-based team can provide end-to-end support if you’re looking to familiarise yourself with e-invoicing ahead of the key deadlines.
Starting with a gap analysis and evaluation of your current invoicing tools, we can work with you to align your process with the VAT rules and address concerns for when the mandate becomes active. Please get in touch with us for more information on our tax solutions.
FAQs on e-invoicing in the UAE
Is e-invoicing mandatory in the UAE?
Yes, e-invoicing will become mandatory for most VAT-registered businesses in the UAE, but it is not happening all at once. The new e-invoicing requirement will first be available on a voluntary basis and then become compulsory in phases. From 1 July 2026, you will be able to start e-invoicing voluntarily or as part of a pilot.
Effective 1 January 2027, e-invoicing will then apply to larger businesses above the revenue threshold set by the FTA, and from 1 July 2027, it will extend to the remaining in-scope VAT-registered businesses. At this stage, the focus is on B2B and B2G transactions.
Is a UAE e-invoice the same as a PDF tax invoice?
No, a UAE e-invoice is not the same as a PDF tax invoice. A PDF tax invoice is considered a static document. It may meet the VAT content requirements, but it will not be recognised as an official e-invoice under the new regime.
Are there additional considerations for large enterprises in the e-invoicing procedure?
If you’re running a large enterprise and operating in other jurisdictions, the practical challenges of adopting e-invoicing might be more complex. You are likely to have multiple ERPs to coordinate prior to the January 2027 implementation date.
In that context, you will need to think about a group-wide design, standardising data and invoice formats across entities, and deciding whether to use a single ASP for the group or different providers for specific systems. Governance also becomes more important when aligning to the UAE’s e-invoicing requirements.
What happens if my business is not ready by the mandate dates?
There may be VAT reporting issues, penalties and audit complications if your business is not fully ready by the implementation date that applies to you. Please reach out to us to assess your processes and prepare for e-invoicing in the UAE.
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