Regulatory updates - United Arab Emirates

The amendments to Ministerial Decision no. 243 of 2025, effective October 1, 2026, entail the following changes:

• Archiving: Article 11 of Ministerial Decision no. 243 of 2025 has been replaced. The previous requirement to store electronic invoices, electronic credit notes and associated data “within the State” has been removed. The amended provision instead requires the records to be retained for the period prescribed under the Tax Procedures Law and to be capable of being produced to the Authority upon request. This aligns with the Ministry of Finance's previous clarification in the e-invoicing guidelines that archiving abroad is generally permitted under these conditions.
• Exclusions: Article 4 has been replaced. The new provision adds business transactions between Persons who are members of the same Tax Group to the list of excluded transactions for a period of 24 months starting from 1 January 2027. The addition now aligns with the e-invoicing guidelines which stated this exclusion.
• Transmission timeline for electronic invoices: Clause 5 of Article 6 has been replaced clarifying that electronic invoices and electronic credit notes must be issued and transmitted within 14 business days from the date of business transaction, whereas the previous provision referred to 14 days.
• System failure: The definition of “System Failure” has been removed from Article 1. In addition, Article 12 of Ministerial Decision no. 243 of 2025, which required Issuers and Recipients to notify the Authority of a System Failure within two Business Days from its occurrence, has been repealed.
• Definitions: The definition of Accredited Service Provider has been amended, while definitions of Tax Group and Taxable Person have been added.

With the amendments, the Ministry of Finance aims to simplify compliance ahead of the introduction of mandatory e-invoicing obligations on January 1, 2027, by creating greater alignment between the legislation and the e-invoicing guidelines and easing certain requirements for businesses. The full text is available in Ministerial Decision no. 197 of 2026.  

Rules for maintaining accounting records and commercial books

FTA Decision No. 4 of 2026, which became effective July 30, 2026, requires records and commercial books retained as Electronic Copies or Photocopies to be:

• Complete and identical to the original: All pages must be retained in original order; partial scans are not accepted.

• Clear and legible: Readable on screen, with ink or paper that does not fade over the retention period, non-coloured copies of coloured originals are permitted provided all details remain legible.
• Accessible to the FTA on request: Including encryption keys or passwords where records are protected, and access to the physical storage location for paper copies.

Concerned Goods imported before 2026

VATP045 clarifies the treatment of Concerned Goods imported on or before 31 December 2025. For such historical imports, businesses may avoid issuing a self-invoice by either obtaining an administrative exception from the FTA, or where applicable, retaining the overseas supplier invoice and relevant customs declaration and correctly reflecting the VAT in the VAT return.

New requirement to verify supplies before recovering input tax

FTA Decision No. 13 of 2026 comes into effect October 1, 2026, and introduces verification requirements for taxable persons before deducting input tax. Businesses must:

• Verify the supplier when first dealing with them and at least every 12 months thereafter, including identity, place of business and relevant risk indicators
• Verify the commercial substance of taxable supplies, including transaction rationale, payment arrangements and pricing
• For suppliers exceeding AED 375,000 (ca. 87,900 EUR) in annual supplies, confirmation of a bank account
• Document the performed verification and retain the supporting evidence

Supplies under AED 10,000 (ca. 2,340 EUR) are exempt from these checks, unless total dealings with that supplier exceed AED 100,000 (ca. 23,400 EUR) over 12 months.

Affected businesses should review the full text of Decision No. 4, Decision No. 13, and VATP045 for details relevant to their operations.

The key update in this version is the addition of Appendix 5 – Advance Payments and Retention Clarification, which provides further guidance on the electronic invoicing treatment of advance payments and retention amounts.

All Accredited Service Providers are requested to review the updated guidelines and assess any implementation, operational, and compliance impacts arising from the new clarification and other updates included in Version 1.1.

The updated UAE Electronic Invoicing Guidelines are available on the Ministry of Finance e-invoicing website.