The UAE government has introduced new legislation, paving the way for the development of an eInvoicing system to boost economic efficiency.
The country’s Ministry of Finance has introduced legislative changes with Federal Decree-Law No. 17 of 2024, which amends Federal Decree-Law No. 28 of 2022 on tax procedures. Additionally, Federal Decree-Law No. 16 of 2024 updates several aspects of Federal Decree-Law No. 8 of 2017 concerning Value Added Tax (VAT).
These legal updates are pivotal for the introduction of an eInvoicing system, which aims to simplify and automate invoicing, benefiting both businesses and government entities by facilitating seamless tax reporting to the Federal Tax Authority (FTA).
The UAE’s eInvoicing system will operate on a decentralised, five-corner model, allowing sellers and buyers to exchange invoices through Accredited Service Providers (ASPs). This model ensures secure and efficient tax compliance by transmitting invoice data to the FTA.
Aligning with international standards, the system adopts the OpenPeppol standard. Federal Decree-Law No. 17 of 2024 defines “eInvoicing system” and empowers the Minister of Finance to determine implementation details, including effective dates and applicable requirements.
In addition, the changes in Federal Decree-Law No. 16 of 2024 expand the definitions of “tax invoice” and “tax credit note” to include electronic versions and introduce requirements for VAT refunds based on eInvoicing compliance. Businesses under the phased roll-out strategy must issue and archive electronic invoices and credit notes to meet record-keeping standards
