UAE updates e-invoicing penalty rules ahead of rollout

Abu Dhabi: The Ministry of Finance (MoF) has announced the issuance of a new Cabinet Decision on Administrative Penalties relating to the UAE e-invoicing framework, replacing the Cabinet Decision No. (106) of 2025.

The amendments have been introduced following stakeholder feedback and form part of the Ministry's ongoing commitment to developing a compliance framework that is clear, proportionate and practical for businesses.

The new Cabinet Decision revises a number of the administrative penalties provided for under the previous Decision to better align them with the nature of the relevant obligations, while maintaining the integrity of the e-invoicing system and encouraging timely compliance.

The amendments are intended to provide greater certainty to businesses as they prepare for the implementation of mandatory e-invoicing in the UAE.

Among the key changes, the revised penalty framework introduces a more proportionate approach to non-compliance by the Issuer and the Recipient with e-invoicingimplementation obligations. Under the new Cabinet Decision, a penalty of Dh5,000 applies for the initial violation, followed by Dh5,000 for each month or part thereof during which the non-compliance continues, subject to a maximum aggregate penalty of Dh50,000 for these violations in any twelve consecutive months.

Additionally, the new Cabinet Decision removes the administrative penalty provided under the previous Cabinet Decision for the Issuer or the Recipient's failure to notify the Authority of a system failure. This change aims to ensure that penalties are applied more appropriately, taking into account the respective responsibilities of the different parties within the eInvoicing ecosystem.

The new Cabinet Decision reflects the Ministry's continued commitment to engaging with the business community and supporting the implementation of the UAE's eInvoicing framework in a transparent and proportionate manner. By refining the penalty regime, the Ministry seeks to support compliance, reduce unnecessary administrative burdens and provide businesses with greater clarity and certainty as they prepare for the transition to digital invoicing.

The new Decision also provides further clarity on preventing the duplication of administrative penalties. Where the same Person acts as an Issuer, a Recipient, or in both capacities in relation to the same violation, only one administrative penalty will be imposed for that violation under the Decision. This ensures that the penalty framework is applied fairly and proportionately.

The amendments further support the UAE's wider digital transformation objectives and reinforce the country's commitment to implementing a modern tax administration framework that supports effective compliance while facilitating a business-friendly environment and aligning with international best practices.