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Co-Founder & CEO movingo
Editor
Author
Iakov Kukushkin
Copywriter, Journalist
Dec 5, 2025
The UAE Ministry of Finance announced the launch of its Electronic Invoicing Framework, which introduces mandatory e-invoicing based on the Peppol standard. This change will have a big impact on the UAE business landscape.
In this article, we will explain the new framework in detail. We will cover how the new system works, its launch date, and which users need to integrate it into their workflow.
In this article, we will explain the new framework in detail. We will cover how the new system works, its launch date, and which users need to integrate it into their workflow.
- What is e-invoicing in the UAE?
- What qualifies as a valid e-invoice?
- What is not considered an e-invoice?
- Key requirements for e-invoices
- Role of Accredited Service Providers (ASPs)
- Who must comply with UAE e-invoicing?
- Explanation of the e-invoicing process in the UAE
- The "Peppol" 5-Corner Model
- UAE e-Invoicing legal framework
- Step-by-step guide to the UAE e-invoicing process
- ERP e-Invoicing integration and automation
- Benefits of e-invoicing for UAE businesses
- Common challenges and how to overcome them
- Penalties and risks of non-compliance
- Practical roadmap for implementing e-invoicing in the UAE from 2025 to 2027
- How movingo helps businesses with UAE e-invoicing
- Key takeaways for UAE businesses
- FAQ: UAE e-invoicing 2026
What is e-invoicing in the UAE?
In the context of the UAE, e-invoicing is a system in which invoices are created, exchanged, and stored electronically in a structured format between suppliers, buyers, and tax authorities. It replaces traditional paper and digital invoices, such as PDFs, with machine-readable data files.
- Combat tax evasion: Real-time reporting closes the "VAT gap." It does so by ensuring the FTA has visibility over transactions as they happen.
- Reduce administrative burden: Automation minimizes manual data entry, reducing errors and processing costs.
- Enhance digital economy: The UAE is aligning with global digital trade standards, such as Peppol (Pan-European Public Procurement Online), to facilitate smoother cross-border transactions.
Until the new system's up and running, we'll still be doing invoicing the old way. So make sure you do it right to avoid penalties and trouble with the tax man. We can help you get your paperwork in order.
What qualifies as a valid e-invoice?
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Format: It must be a structured data file based on the Peppol International (PINT) standard, adapted for the UAE, and written in either XML or JSON formats.
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Validation: It must be validated by an Accredited Service Provider (ASP) before it is considered issued.
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Cryptographic stamp: It must contain a digital signature/stamp to ensure authenticity and integrity.
What is not considered an e-invoice?
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Importantly, the following common formats will no longer be compliant for B2B/B2G transactions once the mandate takes effect:
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Unstructured PDF invoices sent via email.
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Scanned images of paper invoices (JPG, PNG).
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Paper invoices.
💡 Note: "Visual" (normal) PDFs may still be generated for human readability, but the legal invoice is the underlying XML data file.
Key requirements for e-invoices
Digital archiving: Invoices need to be kept electronically usually 5 years or more on a server that's physically located in the UAE. This is called data localization.
Prohibition of offline invoicing: If an invoice is issued "offline" without Accredited Service Provider (ASP) validation, it will be considered a failure to issue a valid tax invoice.
Prohibition of offline invoicing: If an invoice is issued "offline" without Accredited Service Provider (ASP) validation, it will be considered a failure to issue a valid tax invoice.
Role of Accredited Service Providers (ASPs)
ASPs are the "gatekeepers" of the new system. You can't just connect directly to the FTA's network; you have to go through an ASP. They manage the complexities of encryption, XML format conversion, and reporting to the FTA. Businesses will need to either contract with an ASP or use accounting software with an integrated ASP.
Who must comply with UAE e-invoicing?
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B2B (Business-to-Business):
Transactions between VAT-registered businesses within the UAE. -
B2G (Business-to-Government):
All procurement and supply transactions with UAE government entities.
Likely exemptions (subject to final confirmation):
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B2C (Business-to-Consumer):
Initially, retail transactions to end consumers are expected to be out of scope.
Some financial services or transactions in Free Zones may have special rules, but most standard free zone businesses that are registered for VAT will probably need to follow them. Are you unsure if your business complies with the new rules? Let's take a look; it won't take long.
Explanation of the e-invoicing process in the UAE
The "Peppol" 5-Corner Model
The UAE has adopted the Decentralized Continuous Transaction Control and Exchange (DCTCE) model, also known as the "Peppol Five-Corner Model." Unlike a centralized system in which everyone logs in to a single government website, this model employs trusted intermediaries. Let us take a look at the steps referred to as Corners:
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Corner 1 (Supplier)
Generates an invoice using their Enterprise Resource Planning (ERP) or accounting software. -
Corner 2 (Supplier's ASP)
The ASP validates and converts the invoice into a standard format. -
Corner 3 (Buyer's ASP)
Receive the invoice and pass it on to the buyer.
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Corner 4 (Buyer)
Receive structured invoices directly in your ERP/accounting system. -
Corner 5 (FTA)
Receives real-time reports of invoice data from ASPs for tax validation.
UAE e-Invoicing legal framework
Step-by-step guide to the UAE e-invoicing process
- Invoice generation:The supplier creates an invoice in their accounting software (e.g., movingo, SAP, Oracle).
- Data mapping:The software maps the invoice data to the UAE Data Dictionary. This includes standardized fields for VAT ID, line items, and totals.
- Transmission:The software sends the data to the supplier's Accredited Service Provider (ASP).
- Validation:The ASP checks the invoice for errors, such as an invalid TRN or math errors.
✅ If valid: The ASP digitally signs the report and sends it to the FTA (Corner 5).
❌ If invalid: It is rejected immediately and sent back to the supplier for correction. - Exchange:The supplier's ASP sends the validated invoice to the buyer's ASP.
- Receipt:The invoice is automatically ingested by the buyer's system for payment processing.
ERP e-Invoicing integration and automation
To use the new invoicing system, businesses need to update their software so it meets the criteria mentioned above. Enterprises must update their ERPs (SAP, Oracle, and Microsoft Dynamics) to support the Peppol BIS Billing 3.0 standard. For small businesses, this primarily means switching to or upgrading cloud-based accounting software. This software handles the "under the hood" work.
Accounting software can be pretty confusing for beginners. It's also important to make sure you keep your books in order, following all the rules, to avoid getting fined or into any other trouble. To help with that, you could hire a professional accounting firm that specializes in the UAE market to take care of your finances for you.
Benefits of e-invoicing for UAE businesses
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Faster payments: Receiving invoices instantly and error-free reduces payment delays caused by lost or incorrect invoices.
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Reduced costs: Eliminate printing, paper storage, and postage costs.
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Automated reconciliation: Because the data enters the buyer's system automatically, matching purchase orders (POs) to invoices becomes much easier.
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Seamless VAT filing: The FTA will eventually have draft VAT returns ready based on reported invoices, which will simplify the filing process.
Common challenges and how to overcome them
Penalties and risks of non-compliance
- Invalid input VAT
Invoices that were not properly validated through the e-invoicing system may prevent buyers from reclaiming VAT.
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- Failure to issue a tax invoice: AED 2,500 per instance.
- Failure to keep required records: AED 10,000 (first offense) to AED 50,000.
- Operational stoppage
Inability to legally trade with government entities or large compliant corporations.
Practical roadmap for implementing e-invoicing in the UAE from 2025 to 2027
Q1-Q2 2025: Assessment phase
- Audit the quality of current invoice data (TRNs and addresses).
- Check with your current software vendor about their e-invoicing roadmap.
Q3-Q4 2025: Selection phase
- Select an Accredited Service Provider (ASP) or upgrade to compliant software.
- Map the ERP data fields to the UAE Data Dictionary.
July 2026: Phase 1 mandatory go-live
- Large taxpayers (those with revenue of at least AED 50 million) must be active.
- Pilot program for other businesses.
2027: Phase 2 rollout
- The mandate extends to all remaining VAT-registered SMEs.
How movingo helps businesses with UAE e-invoicing
You don't have to figure out how to integrate a new system on your own; we're here to help. movingo is uniquely positioned to bridge the gap for UAE SMEs and enterprises as a local, FTA-accredited accounting solution:
- Full compliance: We provide professional accounting services that comply with the FTA and other government agencies in the Mainland and Free Zones.
- Seamless integration: As your tech partner, we will select and organize the best solution for you, so you won't have to worry about the technical details.
- Get your papers in order: In addition to handling your invoices, we will help you organize your paperwork, submit all necessary reports, and ensure that you meet all deadlines.
Key takeaways for UAE businesses
- The deadline is real:July 2026 is the cutoff for businesses; preparation takes 6-12 months.
- No more PDFs:You must switch to using structured data (XML) for invoicing.
- Partner wisely:Don't try to do it yourself – use trusted services like movingo to do the hard work for you.
FAQ: UAE e-invoicing 2026
Yes, it will be mandatory in phases starting July 1, 2026, for large businesses with revenue of at least AED 50 million, and July 1, 2027, for all other VAT-registered businesses.
All VAT-registered businesses in the UAE that conduct B2B (business-to-business) or B2G (business-to-government) transactions must issue e-invoices.
Yes, but they have more time. SMEs with revenue under AED 50M must appoint an Accredited Service Provider (ASP) by March 31, 2027 and begin full e-invoicing by July 1, 2027.
Valid e-invoice must be a structured data file (XML or JSON) that complies with the Peppol PINT standard. It must also be digitally signed and validated by an Accredited Service Provider (ASP).
Invoice must be generated electronically in a structured format and contain all mandatory fields, such as TRNs, line items, and VAT breakdown. It must also be successfully reported to the FTA via an ASP.
No, VAT registration is only mandatory for businesses with taxable supplies exceeding 375,000 AED per year. Businesses with taxable supplies exceeding AED 187,500 may register voluntarily.
No, once the mandate applies to you, PDFs, Word docs, and paper invoices won't be accepted as valid tax documents for input VAT refunds.
B2C (retail), some financial services, air travel, and government entities are all out for the first few stages.
You must report the failure to the FTA within 2 business days
It uses a 5-corner model: 1. Supplier → 2. Supplier's ASP → 3. Buyer's ASP → 4. Buyer.
Penalties can range from AED 2,500 per incorrect invoice to AED 50,000 for failure to keep records.
You must store e-invoices on a server physically located within the UAE for a minimum of 5 years.
