MoF amends Federal Decree-Law on Tax Procedures, Federal Decree-Law on Value Added Tax to support eInvoicing system

The Ministry of Finance (MoF) has announced the issuance of Federal Decree-Law No. 17 of 2024, amending key provisions of Federal Decree-Law No. 28 of 2022 concerning tax procedures. In addition, Federal Decree-Law No. 16 of 2024 introduces amendments to several provisions of Federal Decree-Law No. 8 of 2017 related to Value Added Tax (VAT).

These legislative updates mark a pivotal step towards implementing the eInvoicing system, reflecting the government’s ongoing commitment to digital innovation and enhancing the efficiency of the national economy.

The eInvoicing system will bring significant benefits to both businesses and government entities by simplifying, standardising, and automating invoicing processes. It will enable the immediate exchange of invoices and ensure seamless tax reporting to the Federal Tax Authority (FTA).

The UAE eInvoicing implementation is based on a decentralised, five-corner model that will allow sellers and buyers to exchange invoices via Accredited Service Providers (ASPs). ASPs will transmit tax invoice data to the FTA enhancing tax compliance in a secure and efficient manner.

The system is designed in line with international best practices, adopting the OpenPeppol standard.

Federal Decree-Law No. 17 of 2024 on tax procedures introduces a definition for the "eInvoicing system" and grants the Minister of Finance the authority to issue the necessary decisions to implement the system, determine its effective dates, and specify the requirements and entities subject to it.

Federal Decree-Law No. 16 of 2024 on VAT introduces broader changes, expanding the definitions of "tax invoice" and "tax credit note" to include electronic invoices. It also adds new definitions for electronic invoices and electronic credit notes.
The amendments further confirm that VAT refunds will be based on eInvoicing compliance requirements, where applicable. Businesses subject to the eInvoicing system, in line with the phased roll-out strategy, will be required to issue invoices and credit notes electronically and archive electronic invoice data to meet record-keeping standards.

Further details regarding businesses and transactions subject to the eInvoicing system, as well as implementation timelines and dates, will be announced through upcoming decisions.

The Ministry of Finance reaffirms its commitment to ensuring a smooth implementation of the eInvoicing system through a phased and well-communicated strategy. By actively engaging stakeholders, the Ministry aims to maximise the benefits of digital transformation, aligning with the UAE’s strategic economic objectives.