(Image caption: The UAE’s e-invoicing system forms part of the country’s push towards a more digital and transparent tax environment. Photo: File.)
The UAE Ministry of Finance has amended its electronic invoicing regulations to provide businesses with greater flexibility, clarify compliance requirements and reduce operational burdens during implementation.
Under Ministerial Decision No. 197 of 2026, which came into effect on October 1, 2026, certain transactions between businesses belonging to the same tax group may be temporarily excluded from the e-invoicing system for 24 months from January 1, 2027.
The transactions will be treated as excluded throughout this period, giving businesses additional time to adapt to the new requirements, the ministry said.
The decision amends provisions of Ministerial Decision No. 243 of 2025, which governs the UAE’s e-invoicing system.
UAE E-Invoicing System to Roll Out in Phases
The UAE introduced its e-invoicing system as part of efforts to build a more digital and transparent tax environment, with implementation planned in phases.
From July 2026, the rollout began with larger businesses generating more than Dh50 million in annual revenue.
Smaller businesses are expected to be brought into the system from January 2027, with full implementation across all business segments planned by 2028.
The latest amendments aim to make the transition easier for businesses while maintaining the regulatory requirements needed for tax compliance.
Businesses Must Retain Electronic Invoices
The new ministerial decision also amends Article 11, which covers the storage of electronic invoices and electronic credit note data.
Under the revised rules, businesses subject to the e-invoicing system must retain all electronic invoices, credit notes and other relevant data for the period prescribed under the Tax Procedures Law.
They must also ensure that these records can be provided to the Federal Tax Authority (FTA) upon request.
Importantly, the amendment removes the previous requirement for electronic invoicing data to be stored within the UAE. The revised provision focuses instead on the retention and accessibility of records for tax compliance purposes.
System Failure Reporting Provisions Removed
The amendments also remove provisions relating to system failures under the previous decision.
This includes repealing Article 12 and deleting the related definition of “System Failure” from Article 1.
As a result, the previous requirement to notify the FTA of a system failure within two business days of its occurrence has been removed from the decision.
Ministry Aims to Improve Ease of Doing Business
The Ministry of Finance said the changes reflect its commitment to making it easier to conduct business in the UAE.
“The amendments reflect the Ministry’s commitment to facilitating the ease of doing business in the UAE by reducing operational burdens on businesses, providing greater flexibility during the implementation of the e-invoicing system, and ensuring that regulatory requirements support an efficient and business-friendly environment,” the ministry said.
The amendments are intended to give businesses more flexibility as the e-invoicing system expands, while reinforcing requirements for maintaining and providing electronic tax records.
