Inserts the legal basis for e-invoicing into the VAT Law: new definitions of the Electronic Invoicing System, electronic invoice and electronic credit note, revised definitions of tax invoice, tax credit note and non-resident person, and replacement of Articles 55, 65, 70 and parts of 76 on tax invoices, credit notes and record keeping; effective thirty days after Official Gazette publication.
Federal Decree-Law No. 16 of 2024 is the amendment that wrote electronic invoicing into the VAT Law. It was issued on 30 September 2024, took effect 30 days after publication in the Official Gazette (the Ministry of Finance records 30 October 2024) and remains in force. It is a short instrument of four articles, published by the Ministry of Finance in Arabic only, and its effect is already consolidated into the published English text of Federal Decree-Law No. 8 of 2017.
Article One replaces three definitions in Article 1 of the VAT Law and adds three new ones. A Tax Invoice is now a written or electronic document recording a taxable supply and its details, including an Electronic Invoice where applicable; a Tax Credit Note is likewise a written or electronic document recording a reduction or cancellation of a taxable supply, including an Electronic Credit Note; and a Non-Resident is any person with no place of establishment or fixed establishment in the UAE who does not usually reside here. The new definitions are the Electronic Invoicing System, an electronic system dedicated to issuing, sending, exchanging and sharing invoice and credit note data under the tax procedures legislation; the Electronic Invoice, an invoice issued, sent and received in a structured electronic format that allows automated electronic processing under that system; and the Electronic Credit Note, defined in the same terms.
Article Two replaces Articles 55, 65 and 70 of the VAT Law and clauses 4 and 5 of Article 76. The new Article 55 keeps the conditions for recovering input tax in the period in which they are first met, holding a compliant tax invoice or import documents and paying the consideration, and adds a new condition in paragraph (c): where the invoice had to be, or was, issued as an Electronic Invoice, the taxable person must retain it in accordance with the Electronic Invoicing System. Recovery missed in that period may be taken in the following one. The new Article 65 restates the duty to issue an original tax invoice for every taxable supply and deemed supply, leaves the content and electronic issuance rules to the Executive Regulation, repeats that any amount collected as tax must be paid to the FTA, and adds clause 5: a registrant subject to the Electronic Invoicing System must issue and deliver its tax invoices in Electronic Invoice form under that system. The new Article 70 does the same for tax credit notes. The replaced clauses 4 and 5 of Article 76 make failure to issue a tax invoice or credit note within the legally prescribed period a ground for an administrative penalty assessment.
The decree-law does not itself set the e-invoicing timetable or say who is covered; those are left to ministerial decisions under the Tax Procedures Law.
Every VAT registrant in the UAE, in particular those the Minister designates as subject to the Electronic Invoicing System, together with VAT-registered recipients whose input tax recovery depends on holding and retaining compliant invoices.
| Article One, Clause 1 | Replaces the VAT Law definitions of Tax Invoice and Tax Credit Note so that each is a written or electronic document that includes the Electronic Invoice or Electronic Credit Note as applicable, and redefines a Non-Resident as a person with no place of establishment or fixed establishment in the UAE who does not usually reside there. |
| Article One, Clause 2 | Adds definitions of the Electronic Invoicing System, an electronic system for issuing, sending, exchanging and sharing invoice and credit note data under the tax procedures legislation, and of the Electronic Invoice and Electronic Credit Note as documents issued, sent and received in a structured electronic format allowing automated processing. |
| Article Two (Article 55) | Restates the conditions for recovering input tax in the first period in which they are met, holding a tax invoice or import documents and paying the consideration, and adds that where an invoice was required or issued as an Electronic Invoice the taxable person must retain it under the Electronic Invoicing System; missed recovery may be claimed in the following period. |
| Article Two (Article 65) | Restates the duty to issue an original tax invoice for every taxable and deemed supply, leaves content and electronic issuance rules to the Executive Regulation, requires any amount collected as tax to be paid to the FTA, and adds that a registrant subject to the Electronic Invoicing System must issue and deliver tax invoices as Electronic Invoices. |
| Article Two (Article 70) | Restates the duty to issue a tax credit note when output tax on a supply is reduced, leaves the details to the Executive Regulation, and requires registrants subject to the Electronic Invoicing System to issue credit notes as Electronic Credit Notes. |
| Article Two (Article 76, Clauses 4 and 5) | Makes failure to issue a tax invoice or the alternative document for any supply, and failure to issue a tax credit note or the alternative document, within the legally prescribed period grounds for an administrative penalty assessment. |
| Article Three | Repeals any provision that conflicts with the decree-law. |
| Article Four | Publication in the Official Gazette with effect 30 days after the date of publication. |
The amended clauses 4 and 5 of Article 76 of the VAT Law require the FTA to issue an administrative penalty assessment where a taxable person fails to issue a tax invoice or credit note, or the alternative document, within the legally prescribed period. The amounts are set in Cabinet Decision No. 40 of 2017 as amended, at AED 2,500 per detected case, and the separate electronic invoicing penalties are in Cabinet Decision No. 106 of 2025. Input tax on an electronic invoice that is not retained under the system is not recoverable.
This amendment is the legal root of the e-invoicing project our bookkeeping clients are now preparing for. On its own it changes little day to day, but it does two things we act on. First, it makes the definition of a tax invoice include an Electronic Invoice, so once a client is designated under the ministerial timetable its invoices must come out of an accredited system or they are not tax invoices at all. Second, the new Article 55 condition ties input tax recovery to retaining electronic invoices under the system, so a client's VAT recovery on purchases will depend on its suppliers' compliance as well as its own. We track the phased implementation decisions alongside this amendment, review clients' invoicing software against the structured format requirement, and remind them that the familiar AED 2,500 per invoice penalty now attaches to electronic issuance failures too.
VAT Law
Imposes value added tax at a standard rate of 5% on supplies of goods and services and imports in the UAE from 1 January 2018, with zero-rated and exempt categories, regi…
E-Invoicing System Decision
Defines the scope of the Electronic Invoicing System: every person conducting business in the UAE must issue and transmit electronic invoices and credit notes through an …
E-Invoicing Implementation Timeline Decision
Sets the e-invoicing roll-out: pilot from 1 July 2026; businesses with revenue of AED 50 million or more appoint an Accredited Service Provider (by 30 October 2026 under …
E-Invoicing Timeline Amendment (May 2026)
Replaces paragraph (a) of Article 5(1) of the implementation decision: businesses with annual revenue of AED 50 million or more now have until 30 October 2026 to appoint …
E-Invoicing System Amendment (October 2026)
From 1 October 2026 revises the e-invoicing system decision: replaces the Accredited Service Provider definition, adds Tax Group and Taxable Person definitions, deletes t…
E-Invoicing Penalties Decision
Fixes the penalties for e-invoicing breaches: AED 5,000 for each month of delay in implementing the system, including failing to appoint an Accredited Service Provider on…
Tax Procedures Law
The common procedural code for all federal taxes: registration, record keeping, returns, voluntary disclosures, FTA audits and assessments, tax agents, administrative pen…
VAT Executive Regulation
The detailed VAT rules: the AED 375,000 mandatory and AED 187,500 voluntary registration thresholds, tax groups, place and date of supply, zero-rating and exemption condi…
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