New E-Invoicing in the UAE: Full Compliance Guide for Business

The  new e-invoicing system in the UAE introduces compulsory e-invoicing, real-time reporting, and digital compliance for all VAT-registered businesses by Q2 2026.

The United Arab Emirates (UAE) is preparing for a shift to e-invoicing of value-added tax (VAT), with the Ministry of Finance and the Federal Tax Authority (FTA) leading its implementation. A phased rollout began with service provider accreditation guidelines in late 2024, followed by upcoming legislation updates and system testing in Q2 2025. Full-scale adoption will begin in Q2 2026.

All value-added tax (VAT)-registered entities will be required to generate, submit, and exchange invoices in a digital format through accredited-service providers (ASP). Once the new framework takes effect in 2026, paper, scanned, and image-based invoices will no longer be acceptable. The government has advised businesses to start preparing now to avoid technical or legal setbacks during the transition.

Scope of the UAE’s new e-invoicing system

Once the new system is implemented, businesses must issue and transmit invoices through a five-corner model built on the Peppol network. This model will apply to both business-to-business (B2B) and business-to-government (B2G) transactions, regardless of the VAT registration status of the parties involved.

The implementation will happen in a phased manner, but the FTA’s eventual goal is full coverage of all taxable transactions across the UAE. The business-to-consumer (B2C) invoices are currently excluded from this system.

For non-tax-registrants or exempt transactions, commercial invoices may still be issued but do not constitute tax invoices. Likewise, self-billed imports from foreign vendors are not subject to Peppol-based e-invoicing compliance.

Understanding the five-corner e-invoicing model

The UAE’s e-invoicing regime will operate on a five-corner model using the Peppol standard. Under this architecture, e-invoices will be exchanged between suppliers and buyers through registered and ASPs, with the FTA’s platform acting as the central hub for verification and control.

Here’s how the five-corner model is structured:

• The issuer is the business that generates the invoice;
• The receiver is the customer or buyer receiving the invoice;
• The sender’s ASP checks the invoice data and sends it simultaneously to the FTA and to the receiver’s ASP;
• The receiver’s ASP then verifies the incoming data and delivers the invoice to the buyer; and
• The FTA’s e-billing platform serves as a central repository. It logs the invoice but does not validate its contents.

All e-invoices will be created, submitted, exchanged, and archived through this framework. The system intends to ensure real-time or near-real-time validation under the Continuous Transaction Controls (CTC) system. And the FTA platform will only act as a clearance layer by verifying invoice content before it reaches the buyer.

Format of the e-invoices

Invoices must be issued in UBL 2.1 format (Universal Business Language) or UAE Peppol Specifications (UAE-PINT) and must be in XML or JSON format. Each invoice must include the Tax identification number (TIN) (first 10 digits of the tax registration number) of both the supplier and buyer, which will act as a unique identifier across the e-invoicing network.

E-invoices cannot be in these formats:

• Unstructured invoice data issued in PDF or Word formats;
• Images of invoices such as JPG or TIFF;
• Unstructured HTML invoices on a web page or in an email;
• OCR (Scanned paper invoices); or
• Paper invoices sent, like images, via fax machines.

In the case of filing as a VAT group, each group member must have its own endpoint through a UAE-ASP. While the group’s Tax Registration Number (TRN) is used across members, invoice exchange must reflect the specific member conducting the transaction. This ensures traceability and accurate reporting of tax obligations at the entity level.

Compliance requirements for taxpayers

Under this new digital system, all VAT-registered businesses will be required to generate and submit invoices electronically using a standard structure. It will apply to both B2B and B2G transactions, regardless of whether the recipient is VAT-registered.

To comply, tax paying businesses need to keep the following in mind:

• Invoices must be submitted in real time to the Federal Tax Authority (FTA) through a certified ASP;
• The payment due date must be specified, even if payment is made on the spot;
• In the case of VAT groups, each member must have its own endpoint via an ASP. While the group’s Tax Registration Number (TRN) is shared, each transaction must include the name and address of the specific entity issuing the invoice;
• Invoices must be generated in machine-readable formats such as XML or JSON, using standards like UBL (Universal Business Language) or PINT (Peppol Invoice Standard);
• Businesses are not required to interact directly with the UAE Peppol Authority. The ASP will handle all compliance and communication on their behalf; and
• Errors in tax invoices must be corrected using credit notes, in accordance with existing VAT procedures.

Businesses operating in UAE should ideally begin auditing current systems, selecting ASPs, and preparing employees for the upcoming requirements to ensure smooth adoption once the system goes live in 2026.

Reporting and error handling

For technical disruptions, if internet access is temporarily unavailable or any service node is down, ASPs and access points are expected to queue and transmit data once connectivity is restored. The required Technical Data Document (TDD) must be submitted in near real-time, though batch submissions are permitted under agreed Service Level Agreement (SLA).

The business identifier used in invoice submissions is the TIN, so the entities not yet registered with the FTA will need to complete this process before participating in e-invoicing.

For cross-border invoicing

For export transactions, if the foreign buyer is already registered in the Peppol network, their electronic address (endpoint) must be included. If they are not registered, then a dummy endpoint can be used, and exchange will not occur via the Peppol system.

But the seller’s service provider (Corner 2) still reports the invoice to the FTA (Corner 5). In such cases, sellers can send a PDF copy to the buyer outside the Peppol network. Also, the foreign buyers are not required to register with a UAE eInvoicing service provider unless obligated by UAE VAT or corporate tax laws.

Accreditation of e-invoicing service providers

Only entities accredited by the FTA will be permitted to act as e-invoicing service providers in the UAE. Accreditation is a prerequisite to operate within the five-corner model and ensures that providers meet all security, technical, and legal standards laid out in this document.

To qualify, a service provider must:

• Be a legal person established in the UAE with a minimum paid-up capital of minimum AED 50,000 (US$13,612.7);
• Be in operation for at least one year as of the date of submission (either the locally incorporated company or their parent company);
• Demonstrate full technical capability to operate the UAE Peppol Specifications (UAE-PINT);
• Stick to real-time or near-real-time transmission protocols;
• Guarantee data protection and authentication during invoice exchange using Data Dictionary issued by the Ministry of Finance;
• Maintain continuous availability and archival systems for all e-invoicing traffic; and
• Possess ISO/IEC 27001 certification.

The Service providers also need to undergo a formal approval process, like the system audits, sandbox testing, and registration with the FTA.

How the businesses can prepare for the transition

The procedural requirements will apply to companies of all sizes, including those currently using manual or semi-automated invoicing processes. So it is advisable to be prepared with some of these measures:

• Assess existing invoicing systems for compatibility with UBL 2.1 and XML data formats;
• Engage accounting and auditing firms to plan integration with ASPs;
• Identify all invoice flows, including exports, self-billed transactions, and intra-group sales;
• Review enterprise resource planning (ERP) and accounting software to ensure digital archiving, timestamping, and digital signatures can be enabled;
• Begin internal training for finance, legal, and tax teams on upcoming compliance requirements;
• Track upcoming FTA circulars in Q2 2025 that will define enforcement and penalties; and
• Consider joining pilot trials of FTA to reduce integration risks during the live phase.

In brief

The UAE’s new e-invoicing framework brings tax filing under direct oversight of the FTA, and businesses will no longer have flexibility over format, timing, or submission method. Each transaction must meet technical, legal, and procedural requirements before it is considered valid.

Companies that invest early in system upgrades and engaging experts will avoid disruption once enforcement begins.

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(US$1 = AED 3.67)

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