Regulatory updates - United Arab Emirates

The UAE MOF of Finance has issued an e-invoicing consultation paper open for feedback from all interested stakeholders until February 27, 2025. This input will be crucial in shaping the future of e-invoicing in the UAE.

The documentation clarifies the path forward, confirming the use of the Peppol network and the Peppol (PINT AE) format in a 5 Corner model approach.

Stay tuned for more updates on this development!

UAE has announced the issuance of Federal Decree-Law No. 17 of 2024, which amends key provisions of Federal Decree-Law No. 28 of 2022  of tax procedures. Additionally, Federal Decree-Law No. 16 of 2024 introduces amendments to some provisions of Federal Decree-Law No. 8 of 2017 related to Value Added Tax (VAT).

Below is the key summary of the changes.

Definitions

Several definitions have been added or revised to support the implementation of e-invoicing, now including specific terms relevant to the e-invoicing system.

Input VAT recovery

Article 55 has been amended to require taxable persons to retain tax invoices compliant with the Electronic Invoicing System as a condition for input VAT recovery. This requirement applies to all invoices issued or required to be issued as electronic invoices.

Tax invoices and credit notes

Articles 65 and 70 have been amended to specify that taxable persons subject to e-invoicing requirements must issue invoices, credit notes, and other related electronic documents in accordance with system standards.

Penalties for non-compliance

Article 76 has been amended to include penalties for failing to issue tax invoices and credit notes within the specified timelines.

This resource outlines the initiative's key objectives and will be the go-to source for stakeholders navigating this digital transition.

The UAE's new e-invoicing system will implement a decentralized 5-corner model, utilizing the Peppol network to enable seamless invoice exchange and ensure full platform interoperability. This approach allows for efficient, secure transmission of electronic invoices between service providers of trading parties, with only certified providers permitted to submit data to a centralized platform managed by the Tax Authority.

The timelines for the mandate roll-out have been further clarified as follows:

• Q4 2024: Service providers can begin the accreditation process, with further details expected to be released soon;
• Q2 2025: Legislation updates will be introduced;
• Q2 2026: Phase 1 go-live.
  
  

With e-invoicing and CTC rapidly gaining traction across the GCC — particularly in Saudi Arabia and now the UAE — it's crucial for businesses in the region to stay ahead of this digital transformation. Pagero is actively monitoring developments in the UAE to ensure you're fully informed and prepared. Stay tuned for more updates!