19 October 2026
The UAE Ministry of Finance has issued Ministerial Decision No. 197 of 2026, which takes transactions between members of the same tax group out of the electronic invoicing system for 24 months, from 1 January 2027 to 31 December 2028. The decision was announced on 19 October 2026 and has applied since 1 October 2026. It also removes the requirement to store e-invoice data inside the UAE and repeals the duty to notify the Federal Tax Authority (FTA) of a system failure within two business days. The main deadline does not move: businesses with annual revenue of AED 50 million or more must appoint an Accredited Service Provider (ASP) by 30 October 2026 and start issuing e-invoices on 1 January 2027.
What Ministerial Decision No. 197 of 2026 changes
The new decision amends Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System, the main set of rules for e-invoicing in the UAE. According to the Ministry, the aim is to give more clarity on certain requirements, support the rollout of the system and reduce the operational burden on businesses. There are three changes.
| Topic | Before | After Decision No. 197 of 2026 |
|---|---|---|
| Transactions inside a tax group | In scope of e-invoicing | Treated as excluded transactions for 24 months from 1 January 2027, until 31 December 2028 |
| Where e-invoice data is stored | Data had to be stored within the UAE | Location requirement removed, data must be kept for the period set by the Tax Procedures Law and provided to the FTA on request |
| System failure | Notify the FTA within two business days of a system failure | Article 12 repealed and the definition of System Failure deleted from Article 1 |
The Ministry described the package as part of its commitment to the ease of doing business in the UAE, with more flexibility during the implementation of the e-invoicing system and regulatory requirements that support an efficient environment for companies.
Tax group transactions: a 24-month exclusion
The largest change concerns groups of companies. Business transactions between persons that are members of the same tax group will be treated as excluded transactions for 24 months, starting on 1 January 2027. In practice, when two companies in one tax group invoice each other during 2027 and 2028, those invoices do not have to go through the e-invoicing system. The Ministry said the exclusion gives businesses greater flexibility and more time to adapt.
Who is in a tax group
Under UAE VAT rules, a tax group is two or more related companies registered for VAT together under a single tax registration number. For such groups, invoices between the holding company and operating companies, for example management fees, shared services, rent or recharges, can be a large share of all invoices issued.
What the exclusion does not cover
The exclusion applies only to transactions inside the group. Invoices that group members issue to customers and suppliers outside the group are not part of this relief. The exclusion is also temporary: it is set for 24 months and ends on 31 December 2028. David Daly, a partner at Gulf Tax Accounting Group, told The National that the move is welcome but that more clarity is needed on specific details, such as how entities that invoice both inside and outside the group should manage their flows.
Data storage: location no longer matters, retention does
Article 11 of Decision No. 243 of 2025 on the storage of electronic invoice and electronic credit note data has been rewritten. Any person subject to the e-invoicing system must keep all electronic invoices, electronic credit notes and associated data for the period prescribed under the Tax Procedures Law and must be able to provide these records to the FTA on request.
The earlier requirement that this data be stored within the UAE has been removed. The Ministry said the focus shifts from the location of storage to the retention and accessibility of records. For companies that use international ERP or cloud platforms with servers outside the country, this removes one of the conditions they had to meet under the e-invoicing rules. The duty to keep the records and to produce them for the FTA stays in place.
System failure notification removed
Decision No. 243 of 2025 required a business to notify the FTA within two business days of the date a system failure occurred. Decision No. 197 of 2026 repeals Article 12, which contained this obligation, and deletes the definition of System Failure from Article 1. The specific two-business-day notification no longer exists in the e-invoicing regulations. The wider obligation to comply with the e-invoicing rules is not removed.
E-invoicing timeline in the UAE
The amendments arrive as the first compliance deadline approaches. Under the UAE model, qualifying transactions are validated and exchanged through accredited service providers, and the relevant data is reported to the FTA. The timeline is set by Ministerial Decision No. 244 of 2025, as amended by Ministerial Decision No. 66 of 2026, which moved the ASP deadline for large businesses from 31 July 2026 to 30 October 2026 and kept the go-live date of 1 January 2027.
| Date | What happens |
|---|---|
| 1 July 2026 | Pilot phase of the e-invoicing system begins |
| 1 October 2026 | Decision No. 197 of 2026 takes effect |
| 30 October 2026 | Businesses with revenue of AED 50 million or more appoint an ASP |
| 1 January 2027 | Mandatory e-invoicing for businesses with revenue of AED 50 million or more, tax group exclusion starts |
| 31 March 2027 | Businesses with revenue below AED 50 million appoint an ASP |
| 1 July 2027 | Mandatory e-invoicing for businesses with revenue below AED 50 million |
| 31 December 2028 | Tax group exclusion ends |
The VAT rules themselves were also updated this year, see our article on Cabinet Decision No. 149 of 2026 amending the VAT Executive Regulation.
What it means for companies in the UAE
Decision No. 197 of 2026 lowers the workload for 2027 and 2028 but does not change who must join the system or when. The practical steps:
- Check whether your company is a member of a VAT tax group and list the flows between group members: management fees, recharges, rent, intercompany sales.
- If your company’s annual revenue is AED 50 million or more, appoint an ASP by 30 October 2026. The exclusion for intra-group transactions does not move this date.
- Prepare e-invoicing for invoices to customers and suppliers outside the group from 1 January 2027.
- Plan intra-group flows for the period after 31 December 2028, when the 24-month exclusion ends.
- Review where invoice data is kept: storage outside the UAE is now possible, but records must be retained for the Tax Procedures Law period and produced for the FTA on request.
- Remove the two-business-day FTA notification from internal procedures if it was built in for system failures.
- If revenue is below AED 50 million, the dates are 31 March 2027 for the ASP and 1 July 2027 for go-live.
This article is for information only and is not tax advice. Questions on a specific group structure should go to your tax adviser and your ASP.
How Atlant Capital can help
E-invoicing brings attention to the structure of a group: which companies sit in the tax group, which licences they hold and how they invoice each other. Atlant Capital helps founders and families set up and restructure companies in the UAE. Our company setup in the UAE service covers the choice of jurisdiction, licence activities and registration of new group entities, and our business consulting team helps plan the group structure and processes 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
Ministerial Decision No. 197 of 2026 takes transactions inside a tax group out of UAE e-invoicing from 1 January 2027 to 31 December 2028, drops the requirement to store e-invoice data within the UAE and repeals the two-business-day FTA notification of a system failure. The decision has applied since 1 October 2026. The key deadlines are unchanged: businesses with revenue of AED 50 million or more appoint an ASP by 30 October 2026 and start e-invoicing on 1 January 2027, the rest follow on 31 March 2027 and 1 July 2027.
Source: Khaleej Times.
FAQ
Are transactions within a UAE tax group subject to e-invoicing?
Not in 2027 and 2028. Ministerial Decision No. 197 of 2026 treats business transactions between members of the same tax group as excluded transactions for 24 months, from 1 January 2027 to 31 December 2028. Invoices from group members to customers and suppliers outside the group are not covered by this exclusion.
When must a UAE business appoint an e-invoicing service provider?
Businesses with annual revenue of AED 50 million or more must appoint an Accredited Service Provider by 30 October 2026 and implement e-invoicing by 1 January 2027. Businesses with revenue below AED 50 million must appoint one by 31 March 2027 and go live by 1 July 2027.
Do e-invoices have to be stored in the UAE?
No. Decision No. 197 of 2026 removed the requirement to store e-invoice and e-credit note data within the UAE. Businesses must still keep all e-invoices, e-credit notes and associated data for the period set by the Tax Procedures Law and provide them to the Federal Tax Authority on request.
Do I need to report an e-invoicing system failure to the FTA?
The specific duty to notify the Federal Tax Authority within two business days of a system failure has been removed. Decision No. 197 of 2026 repealed Article 12 of Decision No. 243 of 2025 and deleted the definition of System Failure, effective from 1 October 2026.
