The UAE has issued Cabinet Decision No. 173 of 2026, setting out the violations and administrative penalties applicable to breaches of the legislation regulating the Electronic Invoicing System.
The UAE has established the violations and administrative penalties for breaches of the Electronic Invoicing System legislation through Cabinet Decision No. 173 of 2026. Issued by Prime Minister Mohammed bin Rashid Al Maktoum on the presentation of the Minister of Finance, the decision builds on the UAE Constitution, Federal Law No. 1 of 1972, Federal Decree-Law No. 13 of 2016 (Federal Tax Authority), Federal Decree-Law No. 8 of 2017 (VAT) and Federal Decree-Law No. 28 of 2022 (Tax Procedures).
The decision governs violations of the Electronic Invoicing System under Federal Decree-Law No. 28 of 2022. Persons who issue, transmit, share, exchange or report electronic invoices and credit notes on a voluntary basis are exempt from the penalties. Where a person acts as an issuer, a recipient or both in respect of the same violation, only one administrative penalty will be imposed.
The schedule defines four violation categories. For failure by an issuer or recipient to implement the system under Ministerial Decision No. 244 of 2025, including failure to appoint an accredited service provider, or failure by a recipient to maintain compliance with Ministerial Decision No. 243 of 2025, the penalty is AED 5,000 for the first instance. A further AED 5,000 applies for each subsequent month or part of a month of continuing non-compliance, capped at AED 50,000 within any 12 consecutive months.
An issuer that fails to issue and transmit an electronic invoice or an electronic credit note to the recipient through the system faces a penalty of AED 100 per document, capped at AED 5,000 per calendar month for each category. Failure by an issuer or recipient to notify the appointed accredited service provider of changes to data registered with the Federal Tax Authority attracts AED 250 per day of delay or part thereof, capped at AED 5,000 per calendar month.
The decision repeals Cabinet Decision No. 106 of 2025 and any conflicting provisions. It comes into force the day after its publication in the Official Gazette.
