UAE E-Invoicing Solution: A Complete guide on how E-Invoicing is working in UAE
The Federal Tax Authority of UAE is moving to implement an E-Invoicing System which is expected to start its first phase in July 2026. Business and government entities are expected to benefit from this new approach to invoicing where simplification, standardization, and automation will help the real-time exchange of invoices and facilitate seamless tax reporting to the Federal Tax Authority UAE. The UAE E-Invoicing solution aims to support this transition by ensuring compliance and efficiency. In this UAE E-Invoicing guide, you will learn everything you need to know.
What is E-Invoicing in UAE?
It is a structured form of invoice data exchanged between buyers and sellers and reported to the Federal Tax Authority of UAE according to regulatory requirements.
Additionally, any unstructured invoice formats of PDFs, JPEGs, scanned copies, email, or anything else would not be considered as an e-invoice.
The purpose of an E-Invoice is that it has to be created in a structured format and it has to be sent from the seller’s system to the buyer’s system.
What are the Objectives of UAE E-Invoicing?
1. Digitalizing Business Activities: Reducing human efforts and intervention in exchange of invoices and reporting to regulatory authorities and increasing efficiency and efficacy for the fiscal eco-system.
2. Efficiency in E-Invoicing: Reducing cost, processing time, and promoting reduction in paper wastage, with an objective to achieve sustainability goals.
3. Digital Economy: Encouraging the development of a digital economy by establishing an expert eInvoice community which supports highly qualified digital eco-system.
4. Reducing VAT Leakage: The major objective of UAE E-Invoicing is to reduce intentional and unintentional VAT Leakages. For the past 6 years of VAT Introduction, revenue from VAT has contributed much to the UAE’s Federal revenue. The Authorities are trying to create an ecosystem where both unintentional as well as intentional efforts of VAT omissions are spotted and corrected.
5. Better Security: UAE E-Invoicing is introduced with Encrypted data and Secured data exchange protocols, ensuring to avoid any risk of fraud or unauthorized access.
What are the Benefits from UAE E-Invoicing?
1. UAE E-Invoicing Regulations will be introduced in a manner that make sure the latest technology of E-Invoicing is accessible to the SME business community compromising around 82% in UAE with less than 3 million AED Turnover.
2. The E-Invoicing Procedure will ensure significant reduction in Invoice Processing cost for the business and authorities in UAE up to 66%.
3. The E-Invoicing in UAE will ensure better cashflows by optimizing invoicing process by reducing errors and delivers to the recipient on time through the channel.
4. Simplifying the Process of Reporting to Authorities will be achieved by the implementation of E-invoicing in UAE
5. Sending and Receiving Invoices beyond borders will be more smooth and secure, by the adoption of Open Peppol E-Invoicing Structure in UAE.
How does E-Invoicing work in UAE?
Step-by-Step Guide on UAE E-Invoicing Framework
Step 1: Supplier sends e-invoice based on an agreed format with suppliers Peppol accredited partner (Flick Network).
Step 2: The peppol accredited partner validates the invoice data and convert the same into an UAE Standard XML Format to be transmitted through peppol.
Step 3: The Peppol Accredited Partner of Supplier sends this data through Peppol to the Buyer’s Accredited Partner (Flick Network or other Access Point Providers).
Step 4: The Buyer’s Peppol partner sends an acknowledgement of receipt to Seller’s Peppol Partner.
Step 5: The Seller’s Accredited Peppol Partner sends the tax-related data to FTA.
Step 6: FTA Sends acknowledgment of receipt to Seller’s Accredited Peppol partner.
Step 7: Seller’s Accredited Peppol Partner send both acknowledgment of FTA and Buyer to Seller ERP System.
What are the Key Points on UAE E-Invoicing to be noted?
1. UAE has choosen a Decentralised Continuous Transaction Control and Exchange Model (DCTCE) or also called as 5 Corner Model.
2. UAE is using Peppol Network for better security and transparency on invoice exchange and interoperability.
3. Peppol International (PINT) is the UAE Data Dictionary, according to E-invoicing has to be created.
4. Currently B2B and B2G Invoices are said to be mandated and no mention of B2C Invoices.
What are the deadlines for E-Invoicing in UAE?
Key dates Milestones
Quarter 4, 2024 Starting Accreditation Process for UAE Service Providers
Quarter 2, 2025 Finalizing Legislation on UAE E-Invoicing
Quarter 2, 2026 Starting Phase 1 of E-Invoicing
Who is the Implementation Authority for UAE E-Invoicing?
The Federal tax Authority is the implementation authority for E-Invoicing in UAE. The Federal Tax Authority is the government entity for administering, collecting, and enforcing federal taxes.
Key Challenges of E-Invoicing in the UAE
Real-Time Data Transmission: Businesses need to send the invoice to the Federal Tax Authority (FTA) in real-time. It requires reliable infrastructure to handle constant data flow without interruptions.
System Integration with the FTA: Your existing business systems need to connect with the FTA’s e-invoicing portal. if your systems are not updated or lack the capacity for smooth integration then it will be complicated. Your business system needs to be compatible with the Peppol network for seamless data exchange is essential.
Compliance with E-Invoicing and VAT Regulations: It’s important for businesses to ensure that their e-invoices meet both e-invoicing and VAT requirements.
How Flick Can Help:
Flick Networks makes e-invoicing in UAE simple. Flick Networks helps you send invoices to the FTA in real-time without delays. We also help you integrate smoothly with the FTA’s e-invoicing portal while ensuring full Peppol compatibility for seamless data exchange. Our solution ensures that all your invoices meet VAT and e-invoicing regulations.
How to prepare for E-Invoicing in UAE?
To implement the UAE E-Invoicing solution effectively follow these steps:
1. Identify the regulation on UAE E-invoicing
2. Make an assessment of your existing ERP/ Accounting Software.
3. Find Accredited Peppol Access point Providers for UAE E-Invoicing.
4. Integrate your Existing ERP with the chosen Access point provider
5. Make sure of testing and training for users
FAQS
1. Which Data’s in an E-invoicing is validated by FTA/MoF Systems?
The Accredited Service Provider needs to validate all the information as required by UAE Data Dictionary before they are exchanged through the Peppol network and reported to FTA.
2. What will be the procedure to deliver a tax invoice through the UAE E-Invoicing Model?
Businesses that are coming under the applicability will be required to engage in sending invoices through Accredited Service Providers on Open Peppol.
3. Can an invoice contain taxable supplies along with exempt or out of scope supplies in UAE E-Invoicing?
Yes, an invoice may contain any transactions that could be taxable, exempt or out of scope.
4. Will separate integrations require for all the VAT Entities in a tax group or single integration with an Access Point Provider in UAE E-Invoicing?
Each member must separately integrate with accredited access point provider in UAE E-Invoicing.
5. How E-Invoices will be send to overseas customers? Should they require to register with an UAE E-Invoicing service provider?
In the case of an export, if the foreign party is already registered within the Peppol network, then the end point of the buyer is required to be provided.
If they are not registered within the Peppol network, then a dummy data could be provided. In such a scenario, the invoice will not be send through Peppol network, but, The Accredited Peppol Service Provider will report the transaction to FTA. The seller must need to send the invoice to the buyer through external channels, such as email.
It is not mandatory for the foreign buyer to enrol with a UAE Accredited Service Provider if he is not mandatorily to do so as per the regulations in UAE.
6. Is UAE E-Invoicing Realtime Reporting?
The FTA (Authority implementing UAE E-Invoicing), currently suggests the exchange between Seller and Service Provider to be real-time.
7. Is there self-billing in UAE E-Invoicing Model? How is Self-Billing treated in UAE E-Invoicing Framework?
In the case of self-billing the buyer (customer) must create the eInvoice and exchange the document with the seller and report it to the Federal Tax Authority through the Accredited Service Provider.
8. What is E-Invoicing in UAE? Is this only Exchange of Data?
E-Invoicing in UAE is not only an exchange of documents between a Seller and Buyer through the Accredited Service Provider, but also includes reporting to Federal Tax Authority.
9. How to prepare for E-Invoicing in UAE?
The taxpayers in UAE should understand their business activities and make sure their invoice data is comprising information as required by the data dictionary and ensure they are complying the requirements of Federal Tax Authority. Once FTA publishes the list of Accredited Service Providers, Taxpayers shall choose their Accredited Service Provider and start onboarding their Solutions for the same.
10. Are business entities who are not VAT Registered need to comply with E-Invoicing?
The UAE E-Invoicing law is applicable for all B2B and B2G Transactions irrespective of their Registration status on VAT.
11. How ERPs are connected with UAE E-Invoicing Solution Providers?
The Accredited Service Providers in UAE shall connect with Business Entities using APIs, Web Interfaces, SFTPs, or ETL Methods.
12. Does Business Need to register themselves with Peppol Authority for UAE E-Invoicing?
The business are not required to connect with Peppol, instead, the accredited Service Provider will be communicating with Peppol Authority.
13. Will E-Invoicing in UAE be applicable for all Businesses in July 2026?
The Federal Tax Authority is planning to provide roll-out phases based on turnover. Details of these phases are yet to be released by the Authority.
14. How will be a Business Identified in the UAE E-Invoicing Framework?
The First 10 Digits of Tax Registration or the TIN number (both are the same) will be considered for identifying a Business in the E-Invoicing Model. For Entities that are not having a registration and want to participate in E-Invoicing, then they have to obtain a TIN.
15. Should we mention the Payment due date in E-Invoice?
Yes, the Payment due date has to be mentioned and if the amount is payable on the due date, then it should be mentioned as the date of issue.
16. Can we cancel or delete an Invoice in UAE E-Invoicing?
The Federal Tax Authority does not allow cancellation or deletion of invoices, instead they can raise credit note against the invoice to be cancelled with proper reasons.
17. How will international or cross-border transactions be treated in UAE E-Invoicing?
The Seller dealing with a buyer who is not required to comply with UAE E-Invoicing Models, shall submit the invoice through the accredited service provider for Reporting to the Federal Tax Authority and send the PDF separately if they are not in Peppol Framework.