UAE prepares for roll-out of new mandatory e-invoicing system

On February 23, 2026, the UAE Ministry of Finance (MoF) announced the issuance of official electronic invoicing guidelines in preparation for the transition to a unified mandatory e-invoicing system. The guidelines are published to provide businesses with more transparency regarding operational expectations and compliance obligations under the new framework. Among others, the guidelines further define the scope by identifying which types of transactions and businesses that are included, provide practical implementation advice, and address non-compliance as well as associated penalties.

Background

The new e-invoicing system is being rolled out to align UAE national practices with international best practices in digital taxation and trade, with the aim of increasing tax compliance and creating a more transparent tax environment for businesses. It relies on the five-corner PEPPOL model for e-invoicing, which was launched in the European Union in 2008 and is now widely used globally. The initiative is part of a wider government-led push to build a robust taxation framework and establish a fully digital economy in the country.

Phased implementation timeline for businesses

The rollout will take place in stages to allow businesses time to prepare. A voluntary pilot phase will begin in July 2026, followed by mandatory compliance for large businesses with revenues exceeding AED 50 million from January 1, 2027. By July 1, 2027, all VAT-registered businesses will be required to comply.

Scope

While business-to-consumer (B2C) transactions are currently out of scope, the system will apply to any person conducting business in the UAE, regardless of VAT registration status. Non-resident VAT-registered entities, that are required to issue tax documents under UAE VAT law, will also have to comply with the new system.

Mandatory use of Accredited Service Providers

All in-scope businesses will be required to use an Accredited Service Provider (ASP), approved by the UAE Ministry of Finance, to manage the exchange of electronic invoices. Currently, there is no option for a company to connect directly to the e-invoicing infrastructure without an ASP acting as an intermediary.