- New Penalty Regime for E-Invoicing: Effective from January 1, 2026, the UAE introduces specific penalties under Cabinet Decision No. 106 of 2025 for e-invoicing non-compliance, including fines for delayed implementation (AED 5,000 per month), late transmission of electronic invoices (AED 100 per invoice, capped at AED 5,000 monthly), and failure to report system malfunctions (AED 1,000 per day).
- Amendments to VAT Law: Federal Decree-Law No. 16 of 2025 alters the VAT Law to streamline administrative processes and tighten input tax recovery controls, including a five-year limit for excess input tax refunds and provisions allowing the Federal Tax Authority (FTA) to deny input tax recovery linked to tax evasion.
- Implications for Compliance: The combination of these changes creates a more stringent compliance framework for UAE businesses, emphasizing the importance of timely e-invoicing implementation, adherence to document retention requirements, and proactive management of VAT refund timelines to mitigate financial penalties and audit risks.
Source RTCsuite
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UAE Sets Fines for E-Invoicing Non-Compliance Starting January 2027
- UAE will enforce electronic invoicing rules from January 1, 2027, with a test phase starting July 2026.
- Taxable persons with annual revenue over AED50m must comply first, followed by all taxable persons from July 1, 2027, and business-to-government transactions from October 2027.
- Approved service providers (ASPs) must be selected by specific deadlines.
- Fines include AED5,000 per month for not implementing the system, AED100 per missing invoice or credit note (capped at AED5,000/month), and AED1,000 per day for failing to report system failures or data changes.
- The Ministry of Finance has published a list of approved service providers.
Source: fiscal-requirements.com
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- 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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