The United Arab Emirates is introducing a mandatory electronic invoicing (e-invoicing) regime as part of its digital tax transformation strategy. The new framework will require VAT-registered businesses to issue structured electronic invoices in compliance with updated VAT and tax procedure legislation.
The system is supervised by the Federal Tax Authority (FTA) in coordination with the Ministry of Finance (MoF).
This guide explains the legal foundation, scope, implementation timeline, and compliance requirements for businesses operating in Dubai and across the UAE.
- Legal Basis for E-Invoicing in the UAE
The UAE e-invoicing framework is embedded in federal legislation:
A. VAT Law
Federal Decree-Law No. 8 of 2017 on Value Added Tax
Amended by Federal Decree-Law No. 16 of 2024
The 2024 amendment introduced:
- Legal recognition of electronic tax invoices
- Structured digital invoice requirements
- Authority for mandatory electronic systems
B. Tax Procedures Law
Federal Decree-Law No. 28 of 2022
Amended by Federal Decree-Law No. 17 of 2024
These amendments strengthen:
- Digital submission obligations
- Electronic record-keeping requirements
- Administrative enforcement mechanisms
Together, these laws establish the binding legal framework for UAE e-invoicing.
- What Is UAE E-Invoicing?
Under the new regime, a valid invoice must:
- Be issued in a structured, machine-readable format (XML/JSON)
- Contain mandatory VAT data fields
- Be transmitted via an Accredited Service Provider (ASP)
- Be capable of electronic reporting to the FTA
PDF or scanned invoices will not qualify as compliant electronic invoices once mandatory enforcement begins.
- UAE E-Invoicing Model: DCTCE Framework
The UAE has adopted a Decentralized Continuous Transaction Control and Exchange (DCTCE) model.
Key Features:
- Businesses must connect through Accredited Service Providers (ASPs)
- Invoice validation occurs before exchange
- Reporting to the FTA occurs in real-time or near real-time
- Alignment with global standards such as UBL and Peppol PINT
This model aligns the UAE with international best practices in digital tax compliance.
- Phased Roll-Out and Key Deadlines (2026–2027)
The UAE will implement e-invoicing in phases to allow businesses sufficient time for system upgrades and compliance readiness.
- Phase Who Is Affected ASP Appointment Deadline Mandatory Compliance Date
- Pilot & Voluntary Adoption Any business N/A From 1 July 2026
- Phase 1 Large businesses (Revenue ≥ AED 50 million) 31 July 2026 1 January 2027
- Phase 2 Smaller businesses 31 March 2027 1 July 2027
- Phase 3 Government entities 31 March 2027 1 October 2027
Source: UAE e-Invoicing implementation roadmap issued by MoF and FTA.
Businesses should monitor official guidance for confirmation of thresholds and executive regulations.
- Scope of Mandatory E-Invoicing
The regime will apply to:
- All VAT-registered businesses
- B2B (Business-to-Business) supplies
- B2G (Business-to-Government) supplies
Businesses operating in mainland UAE, free zones, and designated zones must assess their VAT registration status to determine applicability.
- Record Retention Requirements
Under Article 78 of the VAT Law and Article 15 of the Tax Procedures Law:
- Records must be retained for minimum 5 years
- Electronic archiving must ensure data integrity and accessibility
- Records must be available for FTA audit upon request
- Failure to maintain compliant digital records may trigger administrative penalties.
- Penalties for Non-Compliance
Administrative penalties under the Tax Procedures Law and relevant Cabinet Decisions may include:
- Failure to implement e-invoicing
- Failure to issue structured e-invoices
- Failure to transmit invoices via ASP
- Incorrect record retention
Penalties may include fixed fines and escalating sanctions once enforcement begins.
- Practical Steps for Businesses
To ensure compliance, businesses should:
- Conduct ERP and accounting system readiness assessment
- Engage with an Accredited Service Provider early
- Upgrade internal invoicing workflows
- Train finance and IT teams
- Perform structured invoice testing before go-live
Early preparation is critical, especially for large entities subject to Phase 1 implementation.
Why UAE E-Invoicing Matters Globally
The UAE’s adoption of e-invoicing:
- Enhances VAT compliance transparency
- Supports anti-tax evasion mechanisms
- Aligns with OECD-driven digital tax standards
- Strengthens the UAE’s digital economy framework
For multinational businesses operating in Dubai and internationally, integration with global ERP systems will be essential.
How Lexor Global Tax Consulting LLC Can Assist
At Lexor Global Tax Consulting LLC, we provide:
- UAE e-invoicing readiness assessments
- ERP compliance gap analysis
- ASP onboarding advisory
- VAT process restructuring
- Internal control documentation
- FTA audit support
We support businesses in Dubai, Abu Dhabi, and across the UAE to transition smoothly into the new electronic invoicing era.