Executive summary

The Electronic Invoicing Guidelines — Version 1.0 (the Guidance), published on 23 February 2026 by the Ministry of Finance (MoF) of the United Arab Emirates (UAE), is effective from 1 July 2026 through a phased implementation. The Guidance clarifies several transitional, operational and technical matters relevant to suppliers, buyers, tax groups, holding companies and nonresident entities.

Key clarifications include:

• A 24-month grace period for e-invoicing on intra-value-added tax (VAT) group transactions, applying from 1 January 2027
• Confirmation that data storage and archival systems may be hosted outside the UAE, provided data remains accessible and secure
• Transitional requirements obligating suppliers to issue both a traditional tax invoice and an e-invoice if buyers are not yet live on the e-invoicing system
• Clarifications on self-billing arrangements, particularly if a supplier is live, but the buyer (who issues the invoice) is not yet onboarded
• Confirmation that holding companies with only passive income are out of scope, unless they perform business transactions (e.g., recharges)
• Clarification that nonresident suppliers obligated to issue UAE tax invoices must issue e-invoices
• Clarifications regarding treatment of advance payments and retention amounts, including how adjustments must be recorded in the e-invoice

Detailed discussion

The Guidance provides further clarity on the e-invoicing requirements applicable under Ministerial Decision No. 243 of 2025 and Ministerial Decision No. 244 of 2025. It elaborates on supplier and buyer obligations, data transmission rules, document formats, and the use of Accredited Services Providers (ASPs) for all e-invoicing exchange and reporting.

The release of the Guidance marks a major milestone in the UAE's transition toward a fully digital invoicing ecosystem.

Key clarifications included in the Guidance

24-month grace period for VAT group transactions

Intra-VAT group transactions remain fully within the scope of the UAE e-invoicing framework. However, the MoF has introduced a temporary 24-month grace period, running from 1 January 2027 to 31 December 2028, during which VAT group members are not required to issue e-invoices to one another. This relief applies only to the timing of compliance and does not remove intra-VAT group transactions from the scope. Once the grace period expires, all VAT group members should comply with the e-invoicing obligations for intra-VAT group supplies.

Data storage and archival

Data may be stored either within or outside the UAE, including in cloud-based environments, provided that the integrity of the records is maintained, the Federal Tax Authority (FTA) can access the data promptly upon request and all records remain complete, readable and reproducible. This clarification confirms that the UAE does not require businesses to host their e-invoicing data on servers physically located within the country, provided accessibility and security obligations are fully met.

Transitional requirement to issue both a traditional tax invoice and an e-invoice

If the buyer has not yet implemented e-invoicing, the supplier should issue both a traditional VAT compliant tax invoice, such as a PDF document, and an electronic tax invoice in XML format using the predefined fallback endpoint. This dual invoice requirement ensures that buyers continue to receive a valid tax invoice for VAT purposes while the suppliers fulfil their electronic reporting obligations through the e-invoicing system.

Self-billing arrangements

Self-billing arrangements require both the supplier and the buyer to meet the VAT self-billing conditions. If the supplier has gone live on the e-invoicing system but the buyer, who is responsible for issuing the self-billed invoice, has not yet implemented e-invoicing, the buyer is unable to issue a compliant self-billed electronic invoice. As a result, the self-billing arrangement may need to be temporarily modified or suspended until both parties are fully onboarded to the e-invoicing system.

Holding companies earning passive income

Holding companies that solely earn passive income do not fall within the scope of the e-invoicing requirements. However, if a holding company undertakes any form of recharge, management fee, or other activity that constitutes a business transaction, it falls within scope for e-invoicing and must comply with the applicable implementation timelines and obligations.

Nonresident suppliers

A nonresident supplier required to issue a UAE tax invoice, should issue the invoice in an electronic form, even though the supplier does not have a UAE establishment. To comply with these requirements, the nonresident supplier should appoint an ASP.

Advance payments and retention amounts

E-invoices in relation to advance payments scenarios should include a reference to the initial invoice that was issued at the time the advance was received. Ongoing retention deductions, however, should not be incorporated into the e-invoice calculations. Instead, the retention mechanism should be documented in a separate commercial document, and a separate e-invoice should be issued when the retention amount becomes due.

Implications

The MoF has included the preparation steps and a readiness checklist within the Guidance. The first step for businesses is to identify the e-invoicing requirements applicable. Conducting an early readiness assessment will allow businesses to identify gaps, begin remediation and prepare for critical implementation activities that must take place before an ASP is engaged.