UAE E-Invoicing 2025: Scope, Exclusions & Phased Implementation

UAE E-Invoicing 2025: Scope, Exclusions & Phased Implementation

On 29 September 2025, the Ministry of Finance of the United Arab Emirates issued Ministerial Decision No. 243 of 2025 and Ministerial Decision No. 244 of 2025 to set the scope, the obligations, and the phased implementation of the E-Invoicing System in UAE. In this blog, we will explain all the important points that are included in these two Ministerial Decisions.

What is E-Invoicing in the UAE?

E-Invoicing is the issuing, transmitting, and receiving of invoices and credit note data in a structured electronic format that allows automatic electronic processing. PDF or paper invoices are not considered valid e-invoices under the E-Invoicing System.

Scope of E-Invoicing in the UAE

The Ministry of Finance has announced the scope of the E-Invoicing System to clarify which businesses and transactions will be covered:

• All businesses in the UAE that are engaging in B2B (business-to-business) and B2G (business-to-government) transactions will come under the E-Invoicing System, unless they are specifically excluded.
• B2C (business-to-consumer) transactions are not included in the mandatory scope at this stage, so businesses that deal only with consumers will not be required to issue e-invoices for now.

Exclusions from E-Invoicing in UAE

Some transactions and persons will not be covered by the E-Invoicing System at this stage:

• Government Entities carrying out activities in a sovereign capacity which are not in competition with the private sector.
• International passenger transport services by airlines where an electronic ticket is issued to passengers.
• Ancillary airline services provided directly to passengers where an electronic miscellaneous document is issued.
• International transport of goods by airlines where an airway bill is issued. This exclusion will apply only for a period of twenty-four months from the date the system becomes effective.
• Financial services that are exempt from VAT or that are subject to VAT at the zero rate.
• Any other transactions or persons that may be excluded by a future decision of the Minister.

Implementation of E-Invoicing in UAE

The Ministry of Finance has confirmed that the timelines for E-Invoicing in the UAE will be introduced in the following phases:

Category	Deadline to Appoint Accredited Service Provider	Date of Mandatory Implementation
Pilot Programme	Selected taxpayers invited by MoF and FTA	Starts on 1 July 2026
Large Businesses – revenue of AED 50M or more	By 31 July 2026	From 1 January 2027
Small and Medium Businesses – revenue of less than AED 50M	By 31 March 2027	From 1 July 2027
Government Entities	By 31 March 2027	From 1 October 2027

Requirements in the E-Invoicing System in UAE

The Ministry of Finance has outlined the requirements that every business must follow under the E-Invoicing System:

• All invoices and credit notes must be issued, transmitted, received, and processed in a structured electronic format that allows automatic electronic processing.
• Every business issuing and receiving invoices must appoint an Accredited Service Provider approved by the Federal Tax Authority. The list of accredited providers will be published by the Ministry.
• An e-invoice or a credit note must be issued and transmitted within 14 days from the date of the business transaction and both the issuer and the recipient must process it through the system and report it to the FTA within the timeline set by the Ministry.
• A credit note must be issued in the following cases:
  • When a transaction is cancelled
  • When goods or services are returned
  • When the value of a supply is reduced
  • When there is an error in the invoice
• Each e-invoice and credit note must include all of the data fields and details prescribed by the Ministry of Finance.
• An agent may issue an invoice or a credit note on behalf of a principal and self-billing is allowed if the conditions under the VAT rules are met.
• All invoices, credit notes, and related records must be stored within the UAE, in line with the retention rules of the Tax Procedures Law.
• Any system failure must be reported to the FTA within two business days, following the procedures set by the Authority.

Conclusion

Officially, the Ministry of Finance has announced the deadlines for the phased implementation of the E-Invoicing System in the UAE. Businesses must use this time to prepare for mandatory implementation starting from 1 January 2027, appoint an Accredited Service Provider, and train their teams. For any assistance, you can contact Flick Network at sales@flick.network.