Regulatory updates - United Arab Emirates

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.

The amendment affects large businesses with annual revenues exceeding 50 million AED (ca. 11.56 million EUR). Previously, large businesses were required to appoint an Accredited Service Provider (ASP) by July 31, 2026, but may now do so no later than October 30, 2026.

The timeline for required e-invoicing system implementation, however, remains unchanged. Full implementation for large businesses is required no later than January 1, 2027.

The guidelines confirm timelines, scope and obligations. Key clarifications include:

• Clarification on voluntary and mandatory implementation: Voluntary implementation is permitted before an entity's mandated go-live date. Mandatory implementation follows the phased roll-out starting with large entities on January 1, 2027. E-invoicing penalties apply from mandatory implementation dates, and not for voluntary adherence.
• Abroad archiving allowed, subject to conditions: Electronic Invoices, Credit Notes and the associated data may be stored outside the UAE, provided they remain accessible, reproducible, and verifiable by the FTA throughout the retention period.
• Administrative exceptions to Tax invoice issuance do not apply to e-invoicing: Federal Tax Authority (FTA) administrative exceptions already granted for VAT Tax Invoices/Credit Notes, will not apply to Electronic Invoices/Credit Notes, and new exceptions from issuance will not be granted to e-invoices.
• Grace period for VAT group transactions: Intra-group transactions remain in scope, but a 24‑month grace period from January 1, 2027 suspends e-invoicing obligations between members of the same VAT group. After the grace period, these transactions must comply.
• Buyers not yet onboarded: When issuing Tax Invoices to buyers not yet on e-invoicing, suppliers must issue regular Tax Invoices in addition to the electronic Tax Invoice and include the predefined endpoint 0235:9900000098 on the e-invoice.

Furthermore, the guidelines reiterate the broad scope of e-invoicing for both entities and transactions, including exempt and zero-rated supplies and transactions giving rise to commercial invoices, with limited exclusions (including financial services transactions, airline ticket sales and government entities acting in sovereign capacity).

In-scope entities, referring to any person conducting business in the UAE, whether or not established in the UAE and regardless of VAT registration status (unless specifically excluded), are advised to review the guidelines and begin readiness planning.