Introduction

On February 23, 2026, the Ministry of Finance (MoF) issued detailed operational guidance supporting - Ministerial Decision No. 243 of 2025 (Electronic Invoicing System), Ministerial Decision No. 244 of 2025 (Implementation Timeline), Ministerial Decision No. 64 of 2025 (Accreditation of Service Providers) and the Cabinet Decision No. 106 of 2025 (Penalties). 

As we have already covered what electronic invoicing is in the UAE context at length in previous articles, we will focus here on new and critical elements of the new guidelines.

You can refer to our previous articles here:

• The introduction of e-invoicing in the United Arab Emirates – The Countdown Begins!
• Middle East tax Alert | UAE | UAE e-Invoicing Consultation Paper | MoF Proposes Data Dictionary
• What You Need to Know About the UAE PEPPOL International Invoice (PINT) for e-Invoicing | Alvarez & Marsal | Management Consulting | Professional Services
• MIDDLE EAST TAX ALERT | UAE | Latest VAT law amendments for the upcoming UAE e-Invoicing implementation | Alvarez & Marsal | Management Consulting | Professional Services
• MIDDLE EAST TAX ALERT | UAE | Timely insights into the Ministerial decisions released on the UAE Electronic Invoicing System (EIS) | Alvarez & Marsal | Management Consulting | Professional Services

The UAE Electronic Invoicing Guidelines (UAE e-Invoicing Guidelines) and the Mandatory Fields Specification move the regime from legislative intent to prescriptive technical execution. Pursuant to Article 4 of MD 243 of 2025, e-Invoicing is mandatory for any person conducting business in the UAE, unless specifically excluded.

Key areas of clarifications are:

• Identification mechanics (TIN and VAT groups)
• Intra-group transactions timing relief
• Financial services boundary
• Free Zone and export classification
• Storage interpretation under Article 11
• Embedded transaction-type coding requirements

Scope: A Business-Transaction Driven Regime

Under paragraph six of the guidelines, the mandatory e-invoicing regime applies to:

• Any person conducting business in the UAE, including non-resident UAE VAT registered businesses, obligated to issue tax documents under UAE VAT law.
• In respect to any business transaction.
• Regardless of VAT registration status.

Given the broad definition by MoF, e-Invoicing should be treated as a finance transformation project, not a tax or IT exercise, with a wide business impact as it is fraught with operational risks. 

Sector implication highlights:

• Real Estate Developers: Leasing, management recharges and service charge recoveries may trigger an e-Invoicing obligation, even with the existence of a VAT exempt component. 
• Professional Services/Consulting, Retail:  Intercompany recharges, including management fees, stock transfers, fall squarely within scope.
• Holding Companies: Passive income alone (i.e., no business transactions or other commercial income) is out of scope. However, if the entity recharges costs (e.g., management fees), to third parties or related parties, such recharges constitute business transactions and triggering e-Invoicing obligations.

Clarification Around Identification and TIN 

The Guidelines and Mandatory Fields Specification confirm:

• The participant identifier is derived from the Tax Identification Number (TIN) (first 10 digits of the Tax Registration Number (TRN)).
• A person conducting in-scope transactions in the UAE, but not registered for any tax, must still register with the FTA to obtain a TIN.
  
  VAT group members must use their own individual TIN and not the representative member’s identifier.

Under the UAE Electronic Invoicing System, each entity is identified on the Peppol network via a Peppol Participant Identifier (Peppol ID). The UAE specific structure consists of the scheme code “0235” followed by the entity’s TIN, e.g., 0235:1234567890. Practically, it will require businesses to contact their buyers to collect their Peppol IDs to issue invoices.

Clarification Around Transaction Types 

Under paragraph six of the UAE e-Invoicing Guidelines, in-scope transactions are confirmed to be:

For transactions to be out of scope, they need to relate to supplies made to natural persons not conducting Business (B2C), including supplies made through billing agents. Furthermore, the guidelines align with the VAT legislation to exclude the requirement of electronic documents to validate import of concerned goods and/or concerned services. 

The guidelines also introduces a transitional practice to continue issuing a tax invoice or commercial invoice (i.e., one that is not an XML compliant electronic document) in addition to the electronic document, and use the predefined fallback endpoint (0235:9900000098) where the buyer has not yet implemented e-Invoicing and does not have a participant identifier. 

Exclusions

The Guidelines reiterate the exclusions referenced in Article four of MD 243, which are listed below. Such exclusions are transaction based as opposed to a sector specific blanket exclusion at an entity level:

• Sovereign Government Activities - Transactions conducted by a Government Entity in a sovereign capacity and not in competition with the private sector.
• Airlines – Specific Scenarios - Passenger services with Electronic Tickets and certain ancillary services are excluded.
  A temporary 24-month exclusion applies to goods transport evidenced by an Airway Bill, from the January 1, 2027.
• Exempt Financial Services - Financial services exempt under Article 42 of the VAT Executive Regulations are excluded.

Clarifications Introduced

• Zero-rated exports of exempt financial services remain excluded.
• Financial services that are standard rated domestically are not excluded merely because they qualify as zero-rated exports under Article 31 of the VAT Executive Regulation.

VAT Groups – Scope Confirmed, Timing Deferred

The Guidelines confirm the scope of e-Invoicing laid out under the MD 243 to include intra-group transactions. However, the guidelines introduce a 24-month grace period for intra-group transactions beginning January 1, 2027. This means that e-Invoicing obligations mandated under MD No. 243 of 2025 will not be enforced in respect of business transactions carried out between members of the same VAT group. This further translates to non-application of punitive measures for non-compliance during this period. 

Key points for consideration:

• Intra-group supplies remain legally in scope.
• The grace period only affects the timing of compliance.
• Other third-party transactions must comply per the scheduled.

Hence, this is a timing concession and not a structural exclusion.

We recommend businesses, to the extent where it is feasible, to analyse the e-Invoicing impact on their intra-group supplies during the implementation period. Our experience shows that pushing this requirement further down the line typically lose the business momentum to cater for the significant change management activities that need to take place in terms of process, people and technology in that area while compounding the amount of work needed after go-live as new dependencies emerge.  

Accredited Service Providers (ASP)

The critical role of the ASPs in the UAE e-Invoicing infrastructure has been highlighted as regulated gate keepers in the country. However, it is equally made clear that the legal accountability for invoice accuracy remains with the supplier (or the buyer in a self-billing scenario) and not the ASP.

It is also important to note that the Peppol five corners setup in the UAE means ASPs become an extension and an integral part of the internal finance and operational control framework of businesses and therefore their selection should be treated as a critical business decision. 

Mandatory Fields – Embedded Transaction Flags

The UAE e-Invoicing data schema (PINT AE) published in February 2025 through a public consultation by MoF has been finalised. 

The Mandatory Fields Specification gives practical effect to the Electronic Invoicing regime by requiring that tax relevant classifications are embedded directly into invoice data, rather than inferred from narrative descriptions or external records. A core requirement is the Invoice Transaction Type Code, which obliges issuers to explicitly flag whether a transaction involves:

• Free Zone
• Deemed Supply
• Margin Scheme
• Summary Invoice
• Continuous Supply
• Disclosed Agent Billing
• Supply through E-commerce
• Exports

In addition, e-Invoices must report VAT amounts at a line-item level in AED, irrespective of the invoice currency, together with a tax category code aligned to UAE VAT treatments (e.g., standard-rated, zero-rated, exempt, reverse charge, margin scheme). The inclusion of the Peppol Specification Identifier (PINTAE) is also mandatory and confirms that the invoice complies with the UAE-specific Peppol technical standard.

The regulatory significance is that while Ministerial Decision No. 243 of 2025 establishes the legal obligation to issue Electronic Invoices, the Mandatory Fields Specification operationalises VAT classification, tax determination and audit logic at source, materially reducing reliance on post transaction interpretation and increasing the importance of upfront system accuracy and governance.

As highlighted in our previous alerts, certain data points (such as Transaction Type Code, Goods/Services indicator, Credit Note Reason Code, etc.) are typically not captured in ERP/source systems by most businesses.

Sector implication highlights:

• Free Zone Entities: 
  • Must correctly flag Free Zone transactions.
  • Beneficiary information required in specific Free Zone scenarios. 
• Real Estate, Engineering, Contracting and Construction, the continuous supply flag is critical for milestone billing.
• Automotive/Luxury Goods (Margin Scheme) – Profit margin scheme indicators must be system-driven.
• E-Commerce Platforms - Disclosed agent vs. principal classification must be embedded in invoice metadata.

This transforms e-Invoicing into a structured tax reporting dataset rather than a simple digitised invoice.

Data Retention 

While Article 11 of MD 243 requires storage “within the State”, the new guidelines clarify that:

• Physical server locations outside the UAE are permissible.
• Records must be retrievable and reproducible by the FTA.
• Retention follows Article 3 of Cabinet Decision No. 74 of 2023 (i.e., five years; seven years for real estate; extended for audits by four years and one additional year in case of voluntary disclosure).

Implementation Timeline – MD 244

Paragraph eight of the UAE e-Invoicing Guidelines reiterates the mandatory implementation timeline as below. Further Voluntary implementation begins July 1, 2026: 

Entities must appoint only one ASP for sending and receiving invoices. 

Conclusion

The UAE e-Invoicing Guidelines complete the regulatory framework and move the regime decisively from legislative intent to operational execution. E-Invoicing in the UAE will function as a structured tax data framework, embedding VAT reporting logic and transaction classification directly at source. 

The guidelines, nonetheless, keep the business-friendly spirit of the UAE government by introducing timeline relief on complex areas such as the VAT intra-group transactions and by giving practical steps for businesses to get ready and criteria to select their chosen ASP. 

How A&M can help

A&M provides deep technical expertise in helping businesses in the UAE to get ready for e-invoicing. Our structured methodology has been proven worldwide in extracting the maximum benefits from the original investment in getting ready while de-risking the implementation to ensure compliance from day one.

Contact our experts today to help you in your e-invoicing readiness journey.