The UAE has officially released Cabinet Decision No. 106 of 2025, setting out violations and administrative penalties tied to the country’s new mandatory e-invoicing system. This follows the Ministry of Finance’s E-Invoicing Framework published on 29 September 2025, which also confirms separate e-reporting obligations to the FTA within days of issuing an invoice.
Key Definitions Now Set in Law
The Decision formally defines the core pillars of the regime:
- Electronic Invoice / Credit Note: Must be structured, machine-readable, and fully processable by the official e-invoicing system.
- Issuer & Recipient: Any person obligated to issue, transmit, or receive e-invoices.
- System Failure: Any technical issue that prevents meeting e-invoicing obligations.
These definitions remove ambiguity and set the foundation for enforcement.
Who Is in Scope?
The penalties apply to any taxpayer required to use the e-invoicing system under the Tax Procedures Law.
Those using e-invoicing voluntarily are not subject to these penalties.
Mandatory E-Reporting
Businesses must report e-invoices to the Federal Tax Authority (FTA) within days of issuance, ensuring near real-time compliance and transparency.
Penalties You Should Not Miss
- Failure to implement the e-invoicing system (including not appointing an accredited service provider in time): AED 5,000 per month (or part thereof).
- Late issuance or transmission of e-invoices or e-credit notes: AED 100 per document, capped at AED 5,000 per month.
- Failure to notify the FTA or ASP of system failures or registration changes: AED 1,000 per day of delay.
These penalties are designed to accelerate readiness ahead of the upcoming mandate.
Implementation Timeline
- Pilot Program: Starts July 2026 for selected taxpayers.
- Mandatory Phase 1: Businesses with revenue ≥ AED 50M must comply by January 2027.
- Phase 2: Smaller businesses by July 2027.
- Government entities: By October 2027.
Read More
- See also
- Join the Linkedin Group on Global E-Invoicing/E-Reporting/SAF-T Developments, click HERE
- Join the LinkedIn Group on ”VAT in the Digital Age” (VIDA), click HERE
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