The UAE Ministry of Finance has made changes to its electronic invoicing system to provide greater clarity, support its implementation, and reduce operational burdens on businesses.
In the newly issued Ministerial Decision No. 197 of 2026, which came into effect on October 1st, 2026, businesses of the same tax group can be temporarily excluded from business transactions for 24 months starting from January 1st, 2027.
Such transactions will be treated as excluded transactions throughout this period, which would give businesses greater flexibility and more time to adapt to the system, the Ministry said. This new decision is an amendment of certain provisions of Ministerial Decision No. 243 of 2025 on the e-invoicing system.
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The e-invoicing system was introduced earlier this year, with implementation rolling out in phases. From July 2026, the system began with larger businesses generating more than Dh50 million in annual revenue.
Smaller businesses are expected to be included from January 2027, with full implementation across all segments by 2028. The system forms part of the country’s push towards a more digital and transparent tax environment.
Retaining all e-invoices a must
In addition to the exclusion, the new decision amends Article 11 on the Storage of Electronic Invoice and Electronic Credit Note Data. Under the amended provision, any person subject to the e-invoicing system must retain all electronic invoices, credit notes and any other relevant data for the period prescribed under the Tax Procedures Law.
Businesses must also ensure that such records can be provided to the Federal Tax Authority (FTA) upon request.
Moreover, the amendment removes the previous requirement that such data be stored within the UAE, thereby shifting the focus from the location of storage to the retention and accessibility of records for tax compliance purposes.
The ministerial decision also removes the provisions relating to “System Failure” under the previous decision, including the requirement to notify the FTA of a System Failure within two business days from the date it happened, through the repeal of Article 12 and the deletion of the related definition from Article 1.
“The amendments reflect the Ministry’s commitment to facilitating the ease of doing business in the UAE by reducing operational burdens on businesses, providing greater flexibility during the implementation of the e-invoicing system, and ensuring that regulatory requirements support an efficient and business-friendly environment,” the ministry said in a statement.