The launch of the UAE e-invoicing portal on October 14, 2024, marks the next evolution in the country’s tax system following the 2018 VAT implementation. This digital transformation aims to streamline tax compliance, enhance transparency, and improve revenue collection efficiency.
The system will modernise how businesses process invoices and report taxes, creating a more robust framework for both government oversight and business operations. This represents a strategic move towards a fully digital tax administration system that benefits both authorities and businesses operating in the UAE.
The successful implementation of e-invoicing in Saudi Arabia offers a practical blueprint for the UAE’s rollout. Saudi Arabia’s phased approach, which began with mandatory e-invoicing in 2020 and progressed to real-time reporting in 2023, demonstrates the benefits of a gradual transition coupled with clear technical standards and comprehensive business support. As the UAE develops its own e-invoicing framework, incorporating these tested elements while adapting them to local business needs will be crucial for ensuring smooth adoption and compliance.
So, What Exactly Is e-Invoicing?
Electronic invoicing (e-invoicing) is the exchange of invoice documents between a supplier and a buyer in a structured, integrated data format – an e-invoice – that allows for its automatic and electronic processing.
E-invoices must be:
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Created with the correct structure.
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Transferred from the seller’s system to the buyer’s system.
E-invoices thus eliminate unstructured invoice data issued in PDF or Word formats, images, or paper invoices and sent by fax.
E-invoicing in the UAE
New legislation issued on October 30, 2024 (Federal Decree-Law No. 16 of 2024 and Federal Decree-Law No. 17 of 2024,) introduces fundamental changes to how businesses must handle invoicing.
While traditional electronic formats like PDFs were previously acceptable under VAT regulations, the new system requires structured digital formats that enable automated processing and real-time reporting.
Accredited service providers (ASPs) validate basic invoice information and forward it to the customers through their agents who, in turn, send the invoices to the Federal Tax Authority (FTA).
Notably, there will be no requirement for pre-clearance from the FTA, making the invoicing process more efficient and aligned with international standards.
Implementation Timeline & Business Readiness
The UAE has established a phased rollout schedule, with legislation taking effect in Q2 2025 and mandatory reporting beginning in July 2026. This timeline gives businesses approximately 18 months to prepare their systems and processes for compliance. During this period, businesses must select ASPs, implement necessary technological changes, and train staff on new requirements.
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Q4 2024
- Development of the service provider accreditation requirements and procedures.
- Development of the UAE Data Dictionary.
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Q2 2025
E-invoicing legislation
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July 2026
Phase 1 goes live for reporting.
Working groups (service providers and taxpayers) provide input throughout 2024-2025.
Technical Requirements & Compliance
Under the new framework, businesses must integrate with the UAE’s Decentralised Continuous Transaction Control and Exchange (DCTCE) model.
This requires working with ASPs who will facilitate invoice creation, validation, and transmission through the OpenPeppol network. The system applies to both business-to-business (B2B) and business-to-government (B2G) transactions.
Further, according to UAE VAT law, all VAT-registered sellers must issue tax invoices for transactions exceeding AED 10,000. These invoices must comply with specific formats and standards to ensure readability, authenticity, and adherence to VAT regulations.
Businesses should take immediate steps to assess their current invoicing processes and begin planning for the transition. This includes:
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Evaluating potential service providers.
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Reviewing existing systems.
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Developing implementation timelines that ensure compliance.
The FTA will provide detailed guidance on technical specifications and compliance requirements as the implementation date approaches. Businesses should stay informed about updates and begin preparing their systems and processes for this significant change in tax administration.
For UAE SMEs, e-invoicing isn’t just a regulatory checkbox—it’s a catalyst for efficiency, cost savings, and growth. Through early adoption, businesses can turn compliance into a competitive advantage. Partnering with ASPs and accounting experts ensures a smooth transition, positioning SMEs to thrive in the UAE’s digitised economy.
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