Ministerial Decision No. 243 And 244 Of 2025 - Electronic Invoicing System Implementation Framework

The Ministry has issued following Ministerial Decision (MD's) No.

1. 243 of 2025; and
2. 244 of 2025

establishing the legal and procedural framework for the implementation of the Electronic Invoicing System in the United Arab Emirates. The said decisions outline the scope of application, exclusions from the applicability of e-invoicing, phased mandatory compliance requirements, provisions for voluntary adoption, and the structure of the pilot programme and also provided definitions which shall be relevant for undertaking the said compliance.

We have summarised the key aspects of both MD's together for better understanding:

Pilot Programme

To facilitate a controlled and effective rollout, the Ministry will initiate a Pilot Programme commencing 1 July 2026. Selected participants will be formally notified of their inclusion in the Taxpayer Working Group and must provide written confirmation of their agreement to participate. Participants will be required to comply with all technical and procedural standards applicable to the Electronic Invoicing System under the supervision of the Ministry and the Authority. The same was earlier scheduled to be initiated on 1 January 2026. The extension of 6 months shall provide a good amount of relief to businesses and service providers.

Mandatory Implementation

The Electronic Invoicing System will be introduced in phases, with obligations determined by the taxpayer's revenue and entity classification. Revenue is defined as the gross income earned during the most recent accounting period, based on financial statements prepared in accordance with applicable legislation or other documentation acceptable to the Federal Tax Authority.

The implementation schedule is as follows:

Following the completion of these phases, all remaining persons and government entities subject to the Electronic Invoicing System will be required to comply with the appointment and implementation requirements as determined by the Ministry.

Voluntary Adoption
Effective 1 July 2026, any person may voluntarily implement the Electronic Invoicing System. Voluntary adopters must comply with all technical specifications and procedural requirements.

Scope and Exclusions
The Electronic Invoicing System applies to all persons conducting business in the UAE, unless explicitly excluded. Exclusions include:

• Sovereign activities of government entities not conducted in competition with the private sector;
• International passenger transport by airlines where electronic tickets are issued;
• Ancillary airline services in relation to International passenger transport by airlines documented via Electronic Miscellaneous Documents;
• International goods transport by airlines documented via Airway Bills (exempt for 24 months from the date of applicability);
• Financial services that are exempt or zero-rated under the VAT Executive Regulations;
• Any other transactions or persons as determined by the Minister.

Entities engaged exclusively in Business-to-Consumer transactions are currently excluded from mandatory implementation until further notice.

Voluntary Adoption
Effective 1 July 2026, any person may voluntarily implement the Electronic Invoicing System. Voluntary adopters must comply with all technical specifications and procedural requirements.

Operational Requirements
Ministerial Decision No. 244 of 2025 sets out the technical and procedural obligations for users of the Electronic Invoicing System, including:

• Appointment of an Accredited Service Provider (by both i.e. supplier and recipient) for Issuance and transmission of Electronic Invoices and Credit Notes within 14 calendar days from the date of the business transaction;
• Secure storage of electronic invoicing data within the UAE, in compliance with the Tax Procedures Law;
• Notification to the Authority of any system failure within 2 business days;
• Provision of access to the Authority for audit and compliance purposes, including data sharing under applicable laws and international agreements.

An Electronic Invoice or Electronic Credit Note may be issued by a Person other than the Supplier, provided that the Supplier remains responsible for the accuracy and compliance of the document. This includes:

• Self-Billing, where the Recipient of the goods or services issues the Electronic Invoice or Electronic Credit Note on behalf of the Supplier, subject to mutual agreement and compliance with the Electronic Invoicing System; and
• Agent Billing, where a third party issues the Electronic Invoice or Electronic Credit Note on behalf of the Supplier, provided that the Supplier retains full responsibility for the document.

Given the issuance of amendments in Decree Law, Executive Regulations, Ministerial Decisions, taxpayers are advised to:

• Evaluate their revenue classification to determine applicable compliance timelines;
• Initiate engagement with Accredited Service Providers well in advance of the prescribed deadlines;
• Monitor official communications for potential inclusion in the Pilot Programme;
• Ensure readiness to meet all technical and procedural requirements as defined by the Ministry and the Authority.