From 1 October 2026 revises the e-invoicing system decision: replaces the Accredited Service Provider definition, adds Tax Group and Taxable Person definitions, deletes the System Failure definition, replaces Article 4 on exclusions, Article 6(5) and Article 11, and repeals Article 12.
Ministerial Decision No. 197 of 2026 amends Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System, with effect from 1 October 2026. It makes four changes: it rewrites three definitions, replaces the exclusions article, lengthens the issuing deadline for non-VAT-registered issuers, and relaxes the data storage and system failure rules. It is in force. The English text published by the Ministry of Finance carries a 'CONFIDENTIAL' watermark and leaves the issue date blank; the commencement date is stated in Article Four.
Article One amends the definitions in Article 1 of the 2025 decision. 'Accredited Service Provider' now means a provider accredited under the legislation regulating the Electronic Invoicing System, rather than specifically under Ministerial Decision No. 64 of 2025. Two definitions are added by reference to the VAT Law: 'Tax Group' (two or more Persons registered with the FTA as a single Taxable Person) and 'Taxable Person' (each Person registered or obliged to register for VAT). The definition of 'System Failure' is deleted.
Article Two replaces Article 4 (Exclusions), Article 6(5) and Article 11. The new Article 4 keeps the original Excluded Transactions (sovereign Government Entity activities, Airline passenger and ancillary services under Electronic Tickets and Electronic Miscellaneous Documents, Airline cargo under Airway Bills for 24 months, and VAT-exempt or zero-rated financial services under Article 42 of the VAT Executive Regulation) and adds a new paragraph (f): Business Transactions between members of the same Tax Group are excluded for 24 months starting from 1 January 2027. The Minister may still exclude other transactions and designate Excluded Persons, and excluded persons may opt in and are then bound by all e-invoicing rules except the penalty decisions.
The new Article 6(5) provides that, where the Issuer is not bound by the VAT Law timeline, an Electronic Invoice or Electronic Credit Note must be issued and transmitted within 14 Business Days of the Date of Business Transaction; the original text said 14 days. The new Article 11 requires every Person in the system to retain all Electronic Invoices, Credit Notes and associated data for the period prescribed by the Tax Procedures Law and to be able to produce them to the FTA on request; the original obligation to store the data within the UAE is removed.
Article Three repeals Article 12 of the 2025 decision, which required Issuers and Recipients to notify the FTA of a System Failure within 2 Business Days. Article Four provides for publication in the Official Gazette and commencement on 1 October 2026. The roll-out dates in Ministerial Decision No. 244 of 2025, as amended by Ministerial Decision No. 66 of 2026, are unaffected.
Every Person subject to the Electronic Invoicing System under Ministerial Decision No. 243 of 2025: any Person conducting Business in the UAE, as Issuer or Recipient. The new Tax Group exclusion benefits members of VAT Tax Groups; the longer issuing window benefits issuers that are not VAT Registrants.
| Article One(1) | Replaces the definition of Accredited Service Provider: a Service Provider granted Accreditation to provide Electronic Invoicing Services in the UAE under the legislation regulating the Electronic Invoicing System. |
| Article One(2) | Adds definitions of Tax Group (two or more Persons registered with the FTA as a single Taxable Person under the VAT Law) and Taxable Person (each Person registered or obliged to register for VAT). |
| Article One(3) | Deletes the definition of System Failure from Article 1 of the 2025 decision. |
| Article Two (new Article 4(1)(f)) | Adds to the Excluded Transactions all Business Transactions between members of the same Tax Group, for a period of 24 months starting from 1 January 2027; the other exclusions are carried over unchanged. |
| Article Two (new Article 4(2)–(3)) | Excluded Persons or categories are set by decision of the Minister; an excluded Person may opt in voluntarily and is then bound by all e-invoicing decisions except those on violations and administrative penalties. |
| Article Two (new Article 6(5)) | Where the VAT Law timeline does not apply, the Electronic Invoice or Electronic Credit Note must be issued and transmitted through the system within 14 Business Days from the Date of Business Transaction, replacing the original 14 days. |
| Article Two (new Article 11) | Every Person subject to the system retains all Electronic Invoices, Electronic Credit Notes and associated data for the period prescribed under the Tax Procedures Law and ensures they can be produced to the FTA on request; the in-UAE storage requirement is dropped. |
| Article Three | Repeals Article 12 of the 2025 decision, which required notification of a System Failure to the FTA within 2 Business Days. |
| Article Four | The decision is published in the Official Gazette and comes into force on 1 October 2026. |
The decision sets no penalties. Persons opting into the system voluntarily remain outside the penalty decisions. Penalties for the obligations as amended are those in Cabinet Decision No. 106 of 2025 on administrative penalties for the Electronic Invoicing System.
Clients in VAT Tax Groups and those relying on the exclusions need this amendment to know who in the group must appoint a provider and which transactions are outside the system. For the groups we administer the new exclusion is narrower than it first appears: it covers only transactions between members of a registered VAT Tax Group, only for 24 months from 1 January 2027, and every member still needs a provider for its dealings with customers and suppliers outside the group. Intercompany charges between sister companies under common ownership that have not formed a VAT group remain fully in scope, which is one more reason we review tax grouping with clients before the 2027 deadlines. The move from 14 days to 14 Business Days gives non-VAT-registered issuers, such as small holding companies, a little more room, and the removal of the in-UAE storage rule and the System Failure notice simplifies the provider contracts we review.
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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…
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
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