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E-invoicing in the UAE means invoices are created in a set electronic format and exchanged through an Accredited Service Provider (ASP). Businesses with revenue of AED 50,000,000 or more go live on . Smaller businesses go live on .
Source: Ministry of Finance, Ministerial Decision No. 244, checked .
The legal documents
- Ministerial Decision No. 243: the framework.
- Ministerial Decision No. 244: the implementation dates.
- Ministerial Decision No. 64: how service providers are accredited.
- Cabinet Decision No. 106: the penalties.
- Ministerial Decision No. 197: amendments effective .
How does e-invoicing work in the UAE?
The UAE uses a Decentralized Continuous Transaction Control and Exchange model, called the 5 corner model:
| Corner | Who |
|---|---|
| 1 | The supplier |
| 2 | The supplier's ASP |
| 3 | The buyer's ASP |
| 4 | The buyer |
| 5 | The Federal Tax Authority |
You do not send an invoice by email and call it done. Your system passes the data to your ASP. Your ASP passes it to the buyer's ASP, and the tax data goes to the FTA. The UAE data dictionary is based on Peppol International and is called PINT AE. The Peppol network is used for business to business and business to government exchange.
Since the pilot started in , the 5 corner model has been live and businesses can test exchanging e-invoices through ASPs.
Source: Ministry of Finance, UAE Electronic Invoicing Guidelines and pilot announcement, checked .
When does e-invoicing start in the UAE?
| Group | Appoint an ASP by | Go live |
|---|---|---|
| Revenue AED 50,000,000 or more | (extended from ) | |
| Revenue below AED 50,000,000 | ||
| Government entities |
Revenue means gross income in the most recent accounting period, taken from the financial statements. A voluntary start has been possible since the pilot began in .
The extension to was announced by the Ministry of Finance on , and it said the January go live for the larger group did not change. The extended deadline is today for the larger group. No later extension was found, but we did not check announcements made in the last days of October. Check the Ministry of Finance page before you act.
Source: Ministry of Finance, Ministerial Decision No. 244 and news on targeted amendments, checked .
Which transactions are excluded from e-invoicing?
- Business to consumer transactions, until the Minister decides otherwise. A business making only business to consumer supplies is not subject to the system.
- Government entities acting in a sovereign capacity.
- International passenger air transport with an electronic ticket, and related services.
- International air cargo with an airway bill, for 24 months only.
- Exempt or zero rated financial services.
- Transactions between members of the same tax group, for 24 months from (Ministerial Decision 197).
Ministerial Decision 197 also says e-invoice data no longer has to be stored in the UAE, but it must be kept for the period in the Tax Procedures Law. It removed the system failure rules, including the duty to tell the FTA within 2 business days.
Source: Ministry of Finance, Ministerial Decision No. 243 and news on the amendment of the e-invoicing regulations, checked .
What are the e-invoicing penalties?
| Violation | Penalty |
|---|---|
| Not implementing the system, including not appointing an ASP in time | AED 5,000 for each month or part of delay |
| Not issuing and sending an e-invoice in time | A fixed amount per invoice, up to AED 5,000 per calendar month |
| Not issuing and sending an e-credit note in time | A fixed amount per credit note, up to AED 5,000 per calendar month |
| Not notifying the ASP of changes to registered data | AED 1,000 per day or part of delay |
The table also lists a AED 1,000 daily penalty for not telling the FTA of a system failure. That rule was removed on , and we could not confirm whether the penalty table was changed too. Check the current table.
Source: Ministry of Finance, Cabinet Decision No. 106, checked .
What is not verified
- The issue deadline. Ministerial Decision 243 says within 14 days from the date of the transaction. One summary says Ministerial Decision 197 changed it to 14 business days, but we could not read the primary text. Check Ministerial Decision 243 and 197.
- The text of the decision that extended the ASP deadline.
- The Decree-Law amendments that support e-invoicing. Details are not covered here.
How do I prepare for e-invoicing?
- Confirm whether you fall in the AED 50,000,000 group using your latest financial statements.
- Check whether any exclusion applies to you.
- Choose an ASP from the Ministry of Finance list of accredited providers and sign before your date.
- Ask your accounting software vendor in writing how it connects. See accounting software.
- Clean up customer and supplier master data: names, addresses and TRNs.
- Map your invoice and credit note fields to PINT AE with your ASP.
- Test in the pilot before go live.
- Decide who owns exceptions, corrections and credit notes.
- Train the finance team and write down the process.
Your VAT return and your books depend on clean invoice data, so involve your accountant early. For VAT rules see VAT in the UAE, and for ordinary VAT fines see VAT penalties.
This is general information, not legal advice. DubaiAccountingFirms.com is an independent directory.
