UAE Issues Ministerial Decisions on Electronic Invoicing System (EIS)

The UAE Ministry of Finance (MoF) has announced two key ministerial decisions — Decision No. 243 of 2025 and Decision No. 244 of 2025 — establishing and implementing the Electronic Invoicing System (EIS). These decisions are designed to enhance tax transparency, strengthen compliance, and align the UAE’s VAT framework with global standards for digital taxation.

Following the recent amendments to the UAE VAT Executive Regulations, these decisions clarify several aspects of the e-Invoicing regime, including:

  • The scope of e-Invoicing implementation and related revenue thresholds;

  • The phased rollout of compliance waves and associated timelines;

  • Specific transaction types exempted from e-Invoicing requirements.

While the rulings offer relief to entities engaged in financial services and international transportation, they also broaden the compliance net — setting a low revenue threshold of AED 50 million for the first wave of taxpayers subject to mandatory e-Invoicing.

For most taxpayers in this initial phase, go-live is scheduled for January 1, 2027, excluding those already participating in the pilot program.

Key Highlights

1. Establishment of the Electronic Invoicing System (Decision No. 243/2025)

The EIS will apply to all businesses operating in the UAE, unless explicitly exempted.

Key Exclusions:

  • Government entities performing sovereign activities under UAE VAT Law.

  • International airline passenger transport and related B2C services using electronic tickets.

  • International cargo transport transactions where airway bills are issued.

  • Exempt or zero-rated financial services (as outlined in Article 42 of the VAT Executive Regulation).

  • Any additional categories as specified by the Minister.

2. Business Obligations

  • Issuance and Transmission:
    Businesses must issue and transmit e-Invoices and Credit Notes through the EIS within 14 days of the transaction date.

  • Definition of Transaction Date:
    Defined as the earlier of the date the transaction occurs or the date of payment receipt — an area that may require further clarification, particularly for continuous supplies governed by VAT date-of-supply rules.

  • Accredited Service Providers (ASPs):
    Both issuers and recipients must engage an ASP to facilitate e-Invoice exchange and reporting.

  • Data Residency:
    All e-Invoicing data must be stored within the UAE, consistent with the Tax Procedures Law.

3. Additional Provisions

  • Agents and self-billing arrangements are formally recognized.

  • Voluntary participation in EIS is allowed; however, once opted in, full compliance with system requirements becomes mandatory.

  • Strict reporting obligations to the Federal Tax Authority (FTA) will apply for all registered participants.

    Key Takeaways for Businesses

    1. Begin Preparations Early
    Evaluate your organization’s readiness for e-Invoicing by reviewing critical processes such as Order-to-Cash (O2C), Purchase-to-Pay (P2P), and broader finance, billing, and dataflow systems. Assess how the transition to e-Invoicing and e-Reporting will affect your existing operations and workflows.

    2. Develop a Compliance Roadmap
    Determine when your business falls within the mandatory implementation waves of the Electronic Invoicing System. This is especially important for large enterprises operating across multiple sectors or those subject to special VAT treatments (e.g., financial services or international transportation).

    3. Choose the Right Accredited Service Provider (ASP)
    Review the official list of Accredited Service Providers issued by the Ministry and select a partner whose technical capabilities, integration support, and compliance expertise align best with your organization’s requirements.

    4. Implement Strong Change Management
    Ensure that all key stakeholders — particularly within your finance, tax, and IT teams — are well-informed about the structured e-Invoicing and reporting requirements. Establish clear communication and training plans to help teams adapt their processes effectively.

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