The UAE Cabinet enacted Decision No. 106 of 2025, establishing administrative penalties for violations of the electronic invoicing legislation. This decision is critical as it aims to enforce compliance within the evolving regulatory landscape of electronic transactions, enhancing tax governance and operational efficiency in the Emirates.
The Cabinet’s decision follows a review of existing federal laws, including those governing the Federal Tax Authority and value-added tax.
The legislation introduces definitions pertinent to the electronic invoicing system, clarifying terms such as ‘Electronic Invoice’, ‘Issuer,’ and ‘System Failure’.
UAE e-invoicing under the Electronic Invoicing System (EIS UAE) comes into effect from 31 July 2026.
Penalties for Non-Compliance
These definitions form the groundwork for penalties applicable to non-compliance.
Article 2 of the decision specifies that its regulations will apply to violations relating to the electronic invoicing system as per Federal Decree-Law No. 28 of 2022.
All the provisions do not extend to individuals voluntarily participating in the electronic invoicing system unless mandated by existing legal frameworks.
Article 3 stipulates various administrative penalties, which range from AED 100 for each late electronic invoice or credit note up to a maximum of AED 5,000 per month to AED 5,000 for failure to implement the system within prescribed timelines.
Failure to notify the authorities of system failures incurs a penalty of AED 1,000 for each day of delay.
The introduction of these penalties indicates the UAE’s commitment to strengthening its electronic tax framework, aligning with global trends towards digitalisation in financial reporting.
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