The UAE has eased parts of its upcoming electronic invoicing system, giving businesses more flexibility less than two weeks before the first major compliance deadline.
The Ministry of Finance said on Monday that it has amended the e-invoicing rules that will apply to value-added tax filing from next year. The changes remove some operational burdens and give companies more time to adjust, according to the ministry.
Tax groups get a two-year exclusion
From January 1, 2027, transactions between entities that belong to the same tax group will be treated as “excluded transactions” for 24 months. The ministry said the temporary exclusion gives businesses greater flexibility and more time to adapt to the system.
Tax advisers have welcomed the step but want more detail. David Daly, a partner at Gulf Tax Accounting Group, said it was a positive move while noting that important questions remain. One example is a group member that also issues invoices to companies outside the group. It is not yet clear whether those invoices must go through the e-invoicing system, he said.
Data no longer has to be stored in the UAE
The decision also amends article 11, which covers the storage of electronic invoices and electronic credit notes. Under the revised provision, businesses must keep all electronic invoices, credit notes and associated data for the period set by the Tax Procedures Law, and must be able to provide those records to the Federal Tax Authority on request.
Crucially, the previous requirement that the data be stored within the UAE has been removed. The ministry said this shifts the focus from where records are held to whether they are retained and accessible for tax compliance. For multinational companies and firms that use cloud systems hosted abroad, the change could simplify compliance and reduce costs.
No two-day failure notice
The amendments also scrap the rule requiring companies to tell the Federal Tax Authority within two business days if their e-invoicing system fails. The ministry said the changes are intended to make doing business easier by reducing operational burdens, providing greater flexibility during implementation and ensuring regulation supports an efficient, business-friendly environment.
The October 30 deadline still stands
The amendments come as the first major requirement in the UAE’s phased move to e-invoicing approaches. Businesses with annual revenue of Dh50 million ($13.6 million) or more must appoint an accredited service provider (ASP) by October 30. That deadline was extended from the original July 1 under the first phase of the programme.
Under the UAE’s unified e-invoicing model, all qualifying transactions must be validated and sent through an accredited service provider. Companies that have not yet chosen a provider should check whether they meet the revenue threshold and act before the end of the month.
What businesses should do now
Finance teams can take several practical steps:
- Confirm whether the company’s annual revenue meets the Dh50 million threshold for phase one.
- Select and appoint an accredited service provider before October 30.
- If the business is part of a tax group, review how intra-group transactions will be handled from January 2027.
- Review data-retention policies against the Tax Procedures Law, now that in-country storage is no longer mandatory.
- Seek clarification from advisers or the ministry on mixed scenarios, such as group members that also invoice outside parties.
Why it matters
E-invoicing is central to the UAE’s effort to modernise tax administration and improve data quality. Easing some requirements at this stage suggests authorities are listening to business concerns while keeping the programme on track. For companies already coping with higher costs and a slower economy, any reduction in compliance burden will be welcome, though the October 30 deadline leaves little time to prepare.
