The United Arab Emirates (UAE) is set to roll out the first phase of its new e-invoicing regime by June 2026. This is a significant departure from traditional invoicing formats the country has used for decades. As the Federal Tax Authority (FTA) finetunes the rules and processes, it is time for organizations in the region to prepare for this transition. This change is more than just technology modernization; the shift to e-invoicing requires strategic compliance readiness across systems, processes, and people.

In this article we will dive into the key requirements of this new rule and understand what businesses must do to prepare.

1. Understand the Requirements

• With this new rule, the UAE government aims to automate processes, identify and reduce VAT losses, enhance security of transactions, and ultimately boost the economy and shape policy. The first step is to understand what your business must do to comply with the new e-invoicing mandate.
• E-invoicing will be implemented in 2 phases, the first of which is expected to come into effect by June 2026.
• UAE will follow the Decentralized Continuous Transaction Control and Exchange (DCTCE) using the Peppol framework.
  • The seller sends the invoice data to their certified Peppol Access Point service provider.
  • The service provider changes the document to the required electronic invoice format and sends this to the buyer’s service provider who will then send it to the buyer.
  • The seller’s Access Point service provider will also communicate the tax data in the e-invoice to tax authority on the central government platform, which will send a notification of receipt.
• Understand the format to be used: PDF, XML
• Know the timelines for:
  • Issuing invoices
  • Submitting invoices to the FTA
  • Late fees applicable for late submissions
• Know how long you must securely store invoices for legal and audit requirements: A minimum of 5 years and it must be retrievable for audit purposes.¹
• Understand the data security requirements

E-invoicing rules are still being drafted in the UAE. It is important to follow the developments closely to ensure there are no gaps in your understanding of the requirements.

2. Understand the Process for setting up e-invoicing

Moving from traditional invoicing and billing processes to e-invoicing may seem like a daunting prospect initially. It requires investment in technology, compliance resources, and ongoing monitoring and maintenance.

• The e-invoicing software must be seamlessly integrated with existing ERP and financial systems.
• The e-invoicing system must be integrated with business partners and customers’ and Peppol service providers’ systems and with the FTA platform.
• The system must also be able to extract and classify the data it needs for e-invoicing from multiple structured and unstructured sources.
• You can begin the transition process by mapping existing processes against the new requirements and identifying the specific areas of modernization.

3. Upgrade Technology

Legacy systems cannot handle the rigors of structured invoice generation and processing. There are two approaches you can take.

• You can overhaul existing ERP and billing systems to generate e-invoices in the required formats and integrate with your Peppol service provider.
• Or you can choose to work with an experienced specialized service provider to deploy a robust, cloud-native, e-invoicing solution.
  • The partner must be an accredited Peppol Access Point service provider.
  • The platform must come with pre-built compliance libraries aligned with UBL, PINT, BIS, ZATCA, and other global standards.
  • It must be able to automate key processes.
  • It must be able to carry out real-time validation, intelligently handle business data errors, and automate retries for technical failures to ensure accurate and reliable invoice submissions.
  • It must be equipped with prebuilt connectors that can easily integrate with legacy systems to reduce implementation time and cost.
  • It must allow companies to retain full control on sensitive data allowing for on-premises data preprocessing.
  • It must be able to carry out PDF encryption, QR code generation, UUIDs, hashing, and ensure tamper-proof audit trails.

SunTec’s e-invoicing solution helps UAE businesses comply seamlessly with the new mandate—without overhauling existing systems. Discover more.

4. Train Teams and Align Internal Processes

Technology alone cannot ensure compliance. It is important to train teams across key functions and departments to ensure error-free compliance. Finance and accounts teams must be trained in e-invoice generation and reconciliation. Tax and compliance teams need support in interpreting the requirements of the mandate while IT teams will need to be trained to manage integration and ensure platform maintenance. Sales and procurement teams will have to be trained in correct e-invoice issuance and receipt according to the rules in the country.

E-invoicing is a strategic initiative that can help your organization modernize invoicing processes, ensure accuracy, and plug revenue leaks. It is important to invest in the right tools and platforms and work with experienced partners as this transition is not just about regulatory compliance but also efficiency, and long-term growth.