The UAE Ministry of Finance (MoF) has announced plans to implement a mandatory electronic invoicing (e-invoicing) system for business-to-business (B2B) and business-to-government (B2G) transactions.
The implementation of this e-invoicing system will occur in three stages:
- Q4 2024 – Accreditation of e-invoicing service providers.
- Q2 2025 – Updates to local legislation to mandate e-invoicing.
- July 2026 – Official launch of the system, requiring compliance from taxpayers and enabling tax authorities to validate invoices.
The Ministry aims to enhance digitalisation within the UAE’s fiscal landscape, streamline processes in both public and private sectors, and combat VAT fraud.
Business-to-consumer (B2C) transactions will not be included in the initial rollout.
The UAE has adopted a standard definition of an e-invoice as a structured, machine-readable document based on Extensible Markup Language (XML). This allows for a supplementary human-readable version, typically in PDF format, which many businesses already use.
Under the e-invoicing regime, UAE-based companies must create both machine-readable and human-readable versions of invoices. The human-readable version can be sent via email, while the machine-readable version must be transmitted through the UAE e-invoicing system between sellers and buyers. This version must also be reported to the UAE Federal Tax Authority (FTA) and the MoF.
The new system will operate on the Open Peppol network, which uses a decentralised model for continuous transaction control. The UAE’s e-invoicing framework, based on the Peppol 5-corner model, includes the issuer, receiver, and a central tax platform. Both parties involved in the transaction must have certified Peppol Access Points to validate and transmit invoice data.
According to the new mandate, both issuers and recipients of invoices will be required to use an access point on the Open Peppol network to communicate invoices and receipt acknowledgments. Only accredited e-invoicing solution providers will be allowed to validate and send these invoices to the Federal Tax Authority.
