United Arab Emirates Revises E-Invoicing Penalties

The UAE Ministry of Finance has issued Cabinet Decision No. 173 of 2026 on the Violations and Administrative Penalties Resulting from Violation of the Legislation Regulating the Electronic Invoicing System, replacing the previous penalty framework set out in Cabinet Decision No. 106 of 2025. The new decision takes effect the day after its publication in the Official Gazette.

The decision applies to issuers, recipients, and other persons subject to the UAE’s e-invoicing legislation under Federal Decree-Law No. 28 of 2022 on Tax Procedures. It does not apply to persons who issue, transmit, share, exchange, or report e-invoices and e-credit notes on a voluntary basis. Where a single person acts as both issuer and recipient for the same violation, only one administrative penalty applies.

Key Changes

• The penalty for failing to notify the Accredited Service Provider (ASP) of changes to data registered with the Authority has been reduced from AED 1,000 to AED 250 per day or part thereof.
• Penalties for failing to implement the e-invoicing system, including failing to appoint an ASP, now extend to recipients as well as issuers. They also apply to recipients who implemented the system but later fail to meet their ongoing obligations.
• The penalty for failing to report a system failure to the authority has been removed, consistent with Ministerial Decision No. 197 of 2026, which repealed Article 12 of Ministerial Decision No. 243 of 2025.

Revised Penalty Schedule

• Failure to implement the e-invoicing system (issuer or recipient), or a recipient’s continued non-compliance: AED 5,000 for the first instance, plus AED 5,000 for each month or part of a month of continued non-compliance, capped at AED 50,000 within any 12 consecutive months.
• Issuer’s failure to issue and transmit an e-invoice through the system: AED 100 per invoice, capped at AED 5,000 per calendar month.
• Issuer’s failure to issue and transmit an e-credit note through the system: AED 100 per credit note, capped at AED 5,000 per calendar month.
• Issuer’s or recipient’s failure to notify the ASP of changes to registered data: AED 250 per day of delay or part thereof, capped at AED 5,000 per calendar month.

The UAE’s mandatory e-invoicing rollout applies to large businesses with annual revenue of AED 50,000,000 or more from January 1, 2027, to other businesses from July 1, 2027, and to government entities from October 1, 2027.

There’s more to know about e-invoicing in the United Arab Emirates – explore the new and upcoming regulations.