DUBAI: The UAE has introduced an e-invoicing system aimed at transforming tax collection and record-keeping for businesses, marking a significant step toward digital innovation in the financial sector.
The Ministry of Finance (MoF) has issued Federal Decree-Law No. 17 of 2024, which amends key provisions of Federal Decree-Law No. 28 of 2022 regarding tax procedures, and Federal Decree-Law No. 16 of 2024, which updates several aspects of Federal Decree-Law No. 8 of 2017 concerning Value Added Tax (VAT).
These amendments pave the way for an e-Invoicing system, underscoring the government’s commitment to digital advancement and enhancing economic efficiency. The e-Invoicing system aims to simplify, standardize, and automate invoicing processes for businesses across the UAE, benefiting both private companies and government entities, said the ministry.
This system will facilitate real-time invoice exchange, promoting efficient tax reporting to the Federal Tax Authority (FTA) while improving tax compliance and security. Employing a decentralized five-corner model, it allows sellers and buyers to share invoices through accredited service providers (ASPs), which will send tax invoice data directly to the FTA.
Also Read: Nearly Two-Thirds of Chinese Youth Meet Digital Literacy Standards
Aligning with international best practices, the e-Invoicing system adopts the OpenPeppol standard, adhering to global protocols to ensure secure and efficient tax processing. The new laws empower the MoF to set regulations for the e-Invoicing system, determine implementation timelines, and specify which entities will be required to adopt it.
The amendments to Federal Decree-Law No. 16 of 2024 also expand the definitions of “tax invoice” and “tax credit note” to include electronic formats. These changes mean that VAT refunds will now depend on compliance with e-Invoicing requirements where applicable, establishing a standard for electronic documentation.
The MoF will create a phased implementation plan, with details on specific businesses, transaction types, and timelines to be released in upcoming announcements.
To facilitate a smooth transition, the Ministry is engaging with stakeholders and optimizing the benefits of this digital shift. Through these legislative measures, the UAE continues to pursue its strategic economic goals, embracing digital transformation to enhance both national and regional competitiveness.
