UAE: Framework, scope, and implementation of e-invoicing system

The UAE Ministry of Finance on September 29, 2025, issued two Ministerial Decisions—243 and 244 of 2025—establishing the framework, scope, and phased implementation of the country’s electronic invoicing (e-invoicing) system. These decisions mark a significant step toward digitalizing tax compliance and enhancing transparency across business transactions.

Background

The UAE’s e-invoicing reform introduces a centralized system for issuing and reporting invoices electronically. The system will be implemented in phases, beginning with a pilot program in July 2026 and followed by mandatory implementation based on taxpayer size and type. The mandate applies to all business transactions conducted in the UAE, with specific exemptions for government transactions in a sovereign capacity, certain airline services, and exempt financial services.

The system requires taxpayers to issue invoices and credit notes electronically through accredited service providers, and to store electronic records within the UAE. The system will follow a Peppol-based invoice exchange system with invoices issued and received using the Peppol network and following the schema approved by the tax authorities.

Implementation timelines (Ministerial Decision 244 of 2025)

• Pilot program: Voluntary adoption begins July 1, 2026, for entities meeting technical requirements.
• Mandatory phased rollout:
  • Entities with ≥ AED 50 million revenue:
    • Appoint accredited service provider by July 31, 2026
    • Comply by January 1, 2027
  • Entities with < AED 50 million revenue:
    • Appoint accredited service provider by March 31, 2027
    • Comply by July 1, 2027
  • Government entities:
    • Appoint accredited service provider by March 31, 2027
    • Comply by October 1, 2027
• Business-to-consumer (B2C) transactions: Exempt until further notice.

Scope and obligations (Ministerial Decision 243 of 2025)

• Applies to all business transactions in the UAE, with limited exemptions.
• Invoices must be issued within 14 days of the taxable event.
• Self-billing is permitted for registered taxpayers.
•  Electronic records must be stored in the UAE and made available to authorities or foreign entities under tax agreements.
• Compliance requires adherence to technical specifications set by the tax authority.

Compliance features

The e-invoicing system will utilize the Open Peppol network, operating as a decentralized continuous transaction control and exchange system. Both issuers and recipients must communicate invoices and acknowledgments of receipt through a point of access to the Open Peppol Network. The validation of invoices will be the responsibility of the issuer's e-invoicing solution provider, who will also report the invoices to the Ministry of Finance and the Federal Tax Authority. Only accredited solution providers will be permitted to send validated invoices to the Federal Tax Authority.

Read an October 2025 report prepared by the KPMG member firm in the UAE

For further details, contact a KPMG tax professional:

Philippe Stephanny | philippestephanny@kpmg.com

Lyubov Skenderova | skenderova.lyubov@kpmg.com

Ramon Frias | ramonfrias@kpmg.com