UAE updates e-invoicing penalties for businesses

The Ministry of Finance has issued new rules to update fines for e-invoicing to support businesses and reduce duplicate penalties.

Structured invoices are issued and exchanged digitally between a supplier and a buyer and reported online to the UAE Federal Tax Authority.

The latest amendments - following a cabinet decision - aim to provide businesses with greater regulatory certainty and reduce administrative burdens by introducing more proportionate fines.

A penalty of Dh5,000 applies for an initial accounting violation, followed by Dh5,000 for each month during which the non-compliance continues.

Fines are subject to a maximum aggregate penalty of Dh50,000 for these violations in any 12 consecutive months.

Administrative penalties for the issuer's or the recipient's failure to notify the authority of a system failure have also been removed.

This change aims to ensure that penalties are applied more appropriately, taking into account the respective responsibilities of the different parties within the e-Invoicing ecosystem.

The changes support the UAE's wider digital transformation objectives and reinforce the country's commitment to implementing a modern tax administration framework.

A pilot phase and voluntary e-invoicing adoption launched in July, with a full roll-out planned for October 1, 2027.