Amendments to the UAE electronic invoicing system decision

New Ministerial Decision (MD) No. 197 of 2026 has been issued on 19 October 2026, amending MD No. 243 of 2025 on the Electronic Invoicing System with effect from 1 October 2026. The MD updates a number of features of the UAE’s electronic invoicing framework, which becomes mandatory for large businesses with effect from 1 January 2027. The changes provide for a number of welcome easements to the rules and businesses currently adopting processes to be compliant should take into account these amendments in their planning.

Key changes

The main changes to the Electronic invoicing rules include:

• VAT Group exclusion: Business Transactions between members of the same VAT Group are treated as excluded from the e-invoicing requirements for 24 months starting from 1 January 2027. Practically, this temporary carve out should ease the initial compliance burden on groups with heavy inter-company transaction volumes. Because the relief is time-limited and tied to a fixed start date rather than each group's own go-live date, affected taxpayers should still plan for full e-invoicing compliance on intra-group transactions from 1 January 2029, whilst monitoring developments in the interim in case the requirements are further refined. One option some may consider, as set out in the Ministerial Decision, is to comply voluntarily. This would allow them to test their processes and systems properly and make any necessary changes before compliance becomes obligatory without facing the threat of penalties.
• E-invoice issuance and transmission deadline: The 14-day deadline to issue and transmit an E-Invoice or Credit Note has been updated to 14 Business Days (previously 14 calendar days). The amendment is welcome, effectively lengthening the window for issuance but may require businesses as part of their implementation preparations to update internal governance, process triggers and safeguards to reflect the new deadline.
• Excluded Persons: the Minister of Finance may now designate specific businesses as Excluded Persons (not only by category).
• System Failure: The requirement to notify the UAE Federal Tax Authority (FTA) of a system failure has been repealed entirely, and the related definition removed, removing a potentially burdensome requirement on businesses.
• Record retention: the record retention obligation shifts from needing to store records within the UAE to now merely retaining records for the prescribed period and ensuring they can be provided to the FTA upon request. This raises the possibility of storing e-invoicing data outside the UAE (for example, in overseas or cloud infrastructure), provided, of course, the business can still produce the records on demand - and, importantly, subject to any other non-tax data privacy or regulatory requirements or permissions.
• Other: "Accredited Service Provider" is redefined to refer generally to “the legislation regulating the Electronic Invoicing System" rather than naming MD No. 64 of 2025 specifically. This means future changes to accreditation rules will automatically flow through without requiring a further amendment to MD No. 197 of 2026.

Comment

As many businesses are still in the process of preparing for or finalising their e-invoicing implementation under the original 2025 Decision, the new amendments should be considered as soon as practicable so that any consequential changes to their planned processes and governance approach can be made in good time.