Navigating the Future: E-Invoicing in the United Arab Emirates
Navigating the Future: E-Invoicing in the United Arab Emirates

Navigating the Future: E-Invoicing in the United Arab Emirates

eInvoicing in UAE

UAE advancing into a digital future 

The United Arab Emirates (UAE) is taking a big steps towards digital transformation. As part of the UAE’s broader vision for a digital economy, UAE is set to introduce e-invoicing mandate following the model of e-invoicing system in Saudi Arabia as a blueprint. This initiative is set to revolutionise the way businesses and government entities handle invoicing with significant implications for regulatory compliance and efficiency. 

The UAE’s Federal Tax Authority is gearing up to oversee this transition, ensuring compliance with international standards and reducing the risk of financial discrepancies. 

The key objectives are to streamline business processes, assist with tax filing, provide real-time insights into economic performance, and lower paper waste. 

E-Invoicing Plan – a phased approach: 

  • The preliminary voluntary adoption phase before July 2025 
  • Phase 1 in July 2025 – obligatory e-invoice issuing for all cross-border transactions (export, import, intra-community, etc.) over AED 50,000.  
  • Phase 2 in July 2026 – obligatory e-invoice issuing for all transactions. 

How will it work? 

The e-invoicing system in the UAE will include: 

  • The generation of QR Code e-invoices for B2B, B2G and B2C scenarios, using an ‘E-Invoice Solution’ authenticated and approved by the tax authority. 
  • Integration with the Ministry of Finance’s validation platform, facilitating Continuous Transaction Controls (CTC) through basic checks and electronic customer approvals. 
  • Adherence to established formats, including UBL- XML or PDF with embedded XML, ensuring uniformity and compliance. 

How Can The Businesses be Compliant? 

Under the UAE VAT law, all VAT-registered entities must issue comprehensive tax invoices for transactions over AED 10,000, adhering to specific formats to guarantee readability, authenticity, and compliance. Key aspects include: 

  • Consistent use of electronic formats for invoice generation, transmission, and receipt. 
  • Ensuring unaltered content with appropriate controls, supported by timestamp verification. 
  • Providing secure and straightforward access to e-invoices, including PDF downloadability. 
  • Upholding origin authenticity through certified e-signatures to authenticate communications and data. 

Getting Ready for Change: What Businesses Should Do? 

Businesses in the UAE will need to change how they work to fit the new e-invoicing regulations. This is critical for VAT-registered companies. Businesses are advised to start preparations early, including updating their IT infrastructure and training staff for a seamless transition. 

Below are some consideration to be better prepared for change: 

  • Familiarize with your business’s specific demands and standards (B2B, B2G or B2C). 
  • Identifying suitable e-invoice solutions and methods for e-invoicing. 
  • Change the legacy systems and aligning with the new regulatory requirements 
  • Maintain accurate records and staying updated on e-invoice regulations to ensure ongoing compliance. 
  • Ensure your e-invoices are properly structured and formatted for easy readability. 
  • VAT-registered companies must comply with the record-keeping requirements of the Federal Tax Authority (FTA) and store copies of their invoices for at least 5 years 
  • Establish internal controls and operations to ensure the accurate and compliant creation, transmission, and archiving of electronic invoices. 
  • Consult with tax advisors, legal and technology experts, or industry professionals with knowledge of e-invoicing ordinances to ensure ongoing compliance with the latest requirements. 

Conclusion:  

The UAE’s move towards e-invoicing is a significant step towards realising its vision of a digitally empowered economy. While the transition presents challenges, it offers an opportunity to enhance efficiency, compliance, and transparency in financial transactions. For government regulators, this is a chance to lead the region in digital innovation and set a benchmark for others to follow. For businesses, it is a chance to proactively prepare for the upcoming regulatory changes to ensure seamless a transition. 

How we can help?

At SpendConsole, we have help many companies around the world move to e-invoicing that is compliant with regional regulatory standards. Our team is ready to help your business in the UAE get ready for this change.

Talk to us to see how we can help you get ready for e-invoicing. 

Abid

Abid

Abid Ali is the founding CEO of SpendConsole, with 20 years eProcurement experience. This has led him to pioneer breakthrough AI-powered innovations tackling the toughest e-procurement problems. As a thought leader in Accounts Payables Transformation, he is a regular speaker.

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Navigating the Future: E-Invoicing in the United Arab Emirates
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