UAE Announces Amendments to Tax Laws to Support eInvoicing System

UAE, 7 November, 2024 : The UAE Ministry of Finance has issued amendments to two key tax laws to support the implementation of the eInvoicing system. Federal Decree-Law No. 17 of 2024 updates provisions of Federal Decree-Law No. 28 of 2022 on tax procedures, while Federal Decree-Law No. 16 of 2024 amends parts of Federal Decree-Law No. 8 of 2017 related to Value Added Tax (VAT).

These legislative updates are a significant step towards the government's digital transformation, aiming to simplify, standardize, and automate invoicing processes. The new eInvoicing system will facilitate the exchange of invoices between businesses and government entities and ensure seamless tax reporting to the Federal Tax Authority (FTA).

The eInvoicing system will operate on a decentralised, five-corner model, with Accredited Service Providers (ASPs) transmitting invoice data to the FTA. Designed in line with international best practices, the system adopts the OpenPeppol standard.

The amendments define "eInvoicing system" and empower the Minister of Finance to implement necessary decisions and specify requirements. They also expand definitions of “tax invoice” and “tax credit note” to include electronic versions, and confirm that VAT refunds will be based on eInvoicing compliance. Businesses will need to issue and archive electronic invoices and credit notes as part of the phased roll-out.

Further details on implementation timelines and affected businesses will be provided in upcoming announcements. The Ministry of Finance is committed to ensuring a smooth transition and maximizing the benefits of this digital shift.

Source : www.mof.gov.ae