The UAE Ministry of Finance has introduced a set of fines and penalties for breaches of the regulations governing the electronic invoicing system, ahead of its implementation in July 2026.
Cabinet Decision No. 106 of 2025 outlines penalties that start at Dh100 per day and can reach up to Dh5,000 per month for violations and administrative non-compliance with the electronic invoicing system.
The UAE Electronic Invoicing System requires all invoices to be generated, exchanged, and reported digitally to the Federal Tax Authority in a structured, machine-readable format such as XML, replacing traditional paper and PDF invoices to enhance accuracy, transparency, and efficiency in VAT and other tax processes.
E-invoicing regulations were introduced in the UAE in the second quarter of 2025, with the first nationwide rollout scheduled for July 2026.
The Cabinet Decision sets out the following penalties under Article 106 of 2025.
A monthly fine of Dh5,000, or part thereof, applies for delays by an issuer in adopting the e-invoicing system, including delays in appointing an accredited service provider within the required timeframe.
A penalty of Dh100 for each electronic invoice, capped at Dh5,000 per calendar month, applies when an issuer fails to generate and transmit an e-invoice to the recipient within the stipulated timeframe.
A Dh100 fine for each electronic credit note, up to a ceiling of Dh5,000 per calendar month, applies when an issuer does not issue and transmit an electronic credit note to the recipient within the required timeline.
A daily fine of Dh1,000, or part of a day, applies when an issuer fails to notify the authority of any system failure within the designated notification period.
The same Dh1,000 per day penalty applies to a recipient who does not inform the authority of a system failure within the required timeline.
A Dh1,000 fine per day is also applicable when an issuer or recipient fails to notify the accredited service provider of any changes to data registered with the authority within the prescribed timeframe.
Thomas Vanhee, founding partner at Aurifer, noted that the Cabinet decision has established a penalty framework to support the enforcement of the e-invoicing system.
Anurag Chaturvedi, CEO of Andersen in the UAE, stated that e-invoicing has become a compliance requirement with clear financial implications.
He explained that these penalties are directed at businesses required to adopt the UAE Electronic Invoicing System under the tax procedures framework. Entities testing e-invoicing voluntarily are not the focus. For those within scope, compliance is no longer hypothetical but tied to measurable outcomes.
He added that the decision introduces a clear cost for any delay from a business standpoint.
He pointed out that if a company misses the deadline to implement e-invoicing or appoint an accredited service provider, it faces a Dh5,000 fine for every month or part of a month. This makes readiness a critical performance indicator, as every delay incurs a financial impact.
