The newly introduced articles under Federal Decree-Law No. 16 of 2024 and Federal Decree-Law No. 17 of 2024 have streamlined specific types of tax invoices by implementing requirements for their issuance. These provisions encompass various forms of invoices, including simplified invoices, summary invoices, periodic invoices, and other similar invoice types.
What is the new due date for Simple Tax Invoices?
Simple Tax Inverse Whenever the contents are B2C or the value is AED 10,000 and less. Invoices are to be issued on the date of tax supply to be paid under the new law and thus the companies must be able to issue invoices when they need to.
How Has the Tax Invoices Due Date Changed?
Businesses who supply one customer for the whole taxation period will be provided with an accounts tax invoice summary. The filing period is the 14th day of the second month after the two consecutive months, one month later for corporation payment.
Periodic Payments or Consecutive Invoices: What’s New
Under the previous regime of continuous invoices or periods of payment, there existed no such time frame. However, the current UAE VAT Decree-Law has given a limitation thereof by stipulating 14 days where a reasonable amount of tax invoices that can be considered for such supplies came into effect from January 1, 2023.
What are the main features of UAE’s E-invoicing System?
- Legal Framework: Global Auditable Downscaled Scenarios (SWAD) Standard for the World.
- Federal Law Decree No. 16/2024 E-invoicing regime.
- Roadmap Implementation:
- E-Invoicing Phase 1 goes live July 2026.
- Must make billing systems capable of seamless real-time interaction with the Federal Tax Authority (FTA) e-invoicing system.
- E-Invoice Exchange Five Corner Model.
- The DCTCE (Decentralized Continuous Transaction Control and Exchange) model.
- The primary route for bill transmission between buyers and sellers will be via accredited service providers (ASPs).
- Tax and report submission will be conducted in a secure manner mandated by the Federal Tax Authority (FTA).
How Will E-Invoicing Impact UAE Business Operations?
Businesses in the UAE will have to reconsider their invoicing systems for compliance purposes.
What are organizations required to do?
Businesses will need to:
- Select an Accredited Service Provider (ASP) for implementation of e-invoicing.
- Determine e-invoicing requirements and enroll for terms of agreement compliance.
- Integrate existing payment systems with e-invoicing systems.
- Validate and perform invoice testing prior to actual go-live.
- Transfer tax data electronically to the Federal Tax Authority (FTA).
- Streamline business processes via e-invoicing automation.
In what Way Will Such Activity Improve Tax Compliance?
Electronic invoicing ensures the following:
- Avoid value-added tax (VAT) evasion.
- Streamline tax collections and facilitate reporting.
- End excessive competition by neutralizing unfair advantage.
Benefits of E-Invoicing
| Business Benefit | Impact |
| Faster Payment Transactions | Payments and invoices are settled processed automatically. |
| Reduced Administrative Expenses | Less use of paper invoices decreases the costs of doing business. |
| More Effective Revenue Planning | Visibility in monitoring allows for effective revenue planning by businesses. |
| Easier Global Trade | Compliance with e-invoicing improves trading relations. |
| Collection of Government Revenue | Improved tax compliance increased revenue for the federal treasury. |
| Increased Foreign Investment | Increased inflow of foreign investors due to the financial system’s transparency. |
| Increased Employment | Enhanced prospects for employment in IT, compliance, and tax consultancy services. |
Economic Factor | Expected Impact
| Economic Factor | Expected Impact |
| Expansion of Digital Economy | UAE as a regional hub for Fintech. |
| Incomes for Federal Government | Increased due to improved tax compliance. |
| Foreign Investment | Increased inflow of foreign investors due to the financial system’s transparency. |
| New Employment Positions | Enhanced prospects for employment in IT, compliance, and taxation. |
Conclusion: Future Tax Invoicing of The United Arab Emirates
The introduction of VAT and e-invoicing in the UAE marks a significant event in the country's taxation and economic development. The implementation of strict invoicing deadlines and mandated electronic tax submissions will:
- Enhance business taxpayer compliance.
- Modernize and simplify tax administration.
- Boost the UAE as a stable and economic power global center.
For business entities, the adoption of e-invoicing is both a regulatory requirement and a strategic advantage. Embracing digital transformation enhances operational efficiency, ensures compliance, and improves accuracy, thereby positioning your businesses for sustainable growth in the evolving economy of the UAE. Contact us today and we shall be glad to assist you.
Get a free consultation now and update your invoicing process to meet the 2025 deadline.