30 October 2026
The UAE Ministry of Finance announced on 30 October 2026 a new Cabinet Decision on administrative penalties for the electronic invoicing system, replacing Cabinet Decision No. 106 of 2025. A business that fails to meet its e-invoicing implementation obligations now pays AED 5,000 for the first violation and AED 5,000 for each further month or part of a month the breach continues, with a ceiling of AED 50,000 for these violations in any 12 consecutive months. The penalty for failing to notify the Federal Tax Authority (FTA) of a system failure is removed, and one violation leads to one penalty even when the same company acts as both issuer and recipient. The announcement came on the day businesses with revenue of AED 50 million or more must appoint an Accredited Service Provider (ASP), two months before mandatory e-invoicing starts on 1 January 2027.
What the new Cabinet Decision changes
The Ministry said the amendments follow feedback from businesses and are meant to make the penalty regime clear, proportionate and practical before mandatory e-invoicing begins. According to the announcement, the new decision revises a number of the penalties of Decision No. 106 of 2025 to align them with the nature of each obligation. Three changes are described in detail.
| Topic | Decision No. 106 of 2025 | New Cabinet Decision |
|---|---|---|
| Duty to put e-invoicing in place, issuer and recipient | AED 5,000 for each month or part of a month of delay in implementing e-invoicing and appointing an ASP, no aggregate cap in the table | AED 5,000 for the first violation, then AED 5,000 for each month or part of a month, up to AED 50,000 in any 12 consecutive months |
| Failure to notify the FTA of a system failure | AED 1,000 for each day of delay, for the issuer and for the recipient | Penalty removed |
| Same person as issuer and recipient in one violation | No specific rule in the published penalty table | Only one administrative penalty for that violation |
Implementation penalties: AED 5,000 a month, AED 50,000 at most in 12 months
The main change concerns the obligations of the issuer and the recipient to implement e-invoicing. Under Decision No. 106 of 2025 the penalty for not implementing the system and not appointing an ASP within the timeline was AED 5,000 for each month or part of a month of delay, and the penalty table did not set an aggregate cap for this violation.
Under the new decision a penalty of AED 5,000 applies to the initial violation, followed by AED 5,000 for each month or part of a month during which the non-compliance continues. The total for these violations cannot exceed AED 50,000 in any 12 consecutive months.
In simple arithmetic, AED 50,000 equals ten penalties of AED 5,000. Under the old table, a delay of 12 months would have added up to AED 60,000, that is 12 times AED 5,000. Under the new decision the total for the same 12 months stays within AED 50,000. The ceiling limits the amount, it does not remove the obligation: a business that has not implemented the system remains in breach until it does.
System failure penalty removed
Decision No. 106 of 2025 provided a penalty of AED 1,000 for each day of delay when an issuer or a recipient failed to inform the FTA of a system failure. The new decision removes this penalty for both. The Ministry said the aim is to apply penalties more appropriately, taking into account the responsibilities of the different parties in the e-invoicing ecosystem.
The change follows Ministerial Decision No. 197 of 2026, announced on 19 October 2026, which repealed Article 12 of Ministerial Decision No. 243 of 2025, the rule that required a business to notify the FTA within two business days of a system failure. For issuers and recipients, both the notification duty and the penalty for missing it are now gone. The same decision took transactions inside a tax group out of e-invoicing for 2027 and 2028, as explained in our article on e-invoicing rules for tax groups.
One violation, one penalty
In e-invoicing, the same company is often on both sides of a transaction: it issues invoices to its customers and receives invoices from its suppliers. The new decision clarifies that where the same person acts as an issuer, a recipient or in both capacities in relation to the same violation, only one administrative penalty is imposed for that violation. The Ministry described this as a safeguard against duplicated penalties, so that the framework is applied fairly and proportionately.
What the announcement does not say
The Ministry announcement summarises the key changes. It does not give the number of the new Cabinet Decision or its effective date, and it does not list the remaining items of the new penalty table. Under Decision No. 106 of 2025, for example, failing to issue and send an electronic invoice or an electronic credit note carried AED 100 per document, capped at AED 5,000 per calendar month, and failing to update the ASP on changes in registered data carried AED 1,000 for each day of delay. Whether these amounts change will be clear from the full text of the new decision.
E-invoicing deadlines in the UAE
The announcement does not change the timeline. The dates are set by Ministerial Decision No. 244 of 2025, as amended by Ministerial Decision No. 66 of 2026, and by Ministerial Decision No. 197 of 2026 for tax groups.
| Date | Who | What happens |
|---|---|---|
| 30 October 2026 | Businesses with revenue of AED 50 million or more | Appoint an ASP |
| 1 January 2027 | Businesses with revenue of AED 50 million or more | Mandatory e-invoicing starts |
| 31 March 2027 | Businesses with revenue below AED 50 million | Appoint an ASP |
| 1 July 2027 | Businesses with revenue below AED 50 million | Mandatory e-invoicing starts |
| 31 December 2028 | Members of a tax group | Exclusion of transactions inside the group ends |
What it means for companies in the UAE
For businesses with revenue of AED 50 million or more, 30 October 2026 is the ASP appointment deadline and 1 January 2027 is the go-live date. The new decision puts a known price and a ceiling on missing implementation obligations: AED 5,000 for the first violation, AED 5,000 per month after that, and no more than AED 50,000 in any 12 consecutive months. Businesses with revenue below AED 50 million have until 31 March 2027 to appoint an ASP and until 1 July 2027 to go live. Practical steps for the coming months:
- Confirm your revenue band, AED 50 million or more or below it, and the deadlines that follow from it.
- Appoint an ASP from the Ministry of Finance list of accredited e-invoicing service providers.
- Map who issues and who receives invoices in your company or group, including transactions inside a tax group, which are excluded in 2027 and 2028.
- Check that customer and supplier records in your accounting or ERP system are complete and consistent, including tax registration numbers.
- Keep e-invoices, credit notes and related data for the period required by the Tax Procedures Law and be ready to provide them to the FTA on request.
- Read the full text of the new Cabinet Decision when it is published and update your internal compliance calendar.
This article summarises the Ministry of Finance announcement and is not tax advice. Questions on a specific structure should go to your tax adviser and your ASP.
How Atlant Capital can help
E-invoicing works on top of clean bookkeeping: correct customer and supplier data, consistent VAT treatment and records that can be produced for the FTA when asked. Our accounting and audit service helps companies in the UAE keep their books and records in order, and our business consulting team helps plan the structure and processes of a company as it grows. How mainland and free zone companies differ on licensing, contracts and tax is explained in our guide mainland vs free zone company in the UAE.
Conclusion
The new Cabinet Decision announced on 30 October 2026 replaces Decision No. 106 of 2025. Penalties for failing to meet e-invoicing implementation obligations are now AED 5,000 for the first violation and AED 5,000 per month or part of a month after that, capped at AED 50,000 in any 12 consecutive months. The penalty for not notifying the FTA of a system failure is removed, and one violation leads to one penalty when the same person is issuer, recipient or both. The deadlines stay in place: 30 October 2026 and 1 January 2027 for businesses with revenue of AED 50 million or more, 31 March 2027 and 1 July 2027 for the rest.
Source: UAE Ministry of Finance.
FAQ
What is the penalty for not implementing e-invoicing in the UAE?
Under the new Cabinet Decision announced on 30 October 2026, the penalty is AED 5,000 for the initial violation and AED 5,000 for each further month or part of a month the non-compliance continues. The total for these violations cannot exceed AED 50,000 in any 12 consecutive months. The penalty applies to both issuers and recipients.
Is there still a penalty for not reporting an e-invoicing system failure to the FTA?
No. The new decision removes the penalty of AED 1,000 per day that Decision No. 106 of 2025 set for an issuer or a recipient who failed to notify the FTA of a system failure. The notification duty itself was repealed earlier by Ministerial Decision No. 197 of 2026.
Can a company be fined twice for one e-invoicing violation as issuer and recipient?
No. Where the same person acts as an issuer, a recipient or in both capacities in relation to the same violation, only one administrative penalty is imposed for that violation under the new decision.
When does mandatory e-invoicing start in the UAE?
Businesses with annual revenue of AED 50 million or more must appoint an ASP by 30 October 2026 and start e-invoicing on 1 January 2027. Businesses with revenue below AED 50 million must appoint an ASP by 31 March 2027 and go live on 1 July 2027.
