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05 December 2025

UAE Ministry of Finance publishes Cabinet Decision on penalties for noncompliance with e-invoicing

  • The United Arab Emirates (UAE) Ministry of Finance, on 24 November 2025, issued Cabinet Decision No. 106 of 2025, establishing the framework for violations and administrative penalties related to e-invoicing.
  • The Cabinet Decision applies to all persons subject to e-invoicing, excluding voluntary participants.
  • The Cabinet Decision introduces a structured penalty regime for noncompliance, including delays in system implementation, failure to issue or transmit electronic invoices and credit notes and failure to report system failures or update registered data.
  • Businesses in the UAE should review their e-invoicing processes and adopt measures for compliance with e-invoicing requirements.
 

Executive summary

On 24 November 2025, the Ministry of Finance (MoF) of the United Arab Emirates (UAE) published on its website Cabinet Decision No. 106 of 2025 on the Violations and Administrative Penalties Resulting from Violation of the Legislation Regulating the Electronic Invoicing System on the Electronic Invoicing System (CD No. 106). CD No. 106 introduces a framework for violations and administrative penalties related to the e-invoicing system.

CD No. 106 will be effective upon its publication in the Official Gazette.

Detailed discussion

Background

The MoF initially introduced the concept of e-invoicing during the E-Invoicing Exchange Summit in February 2024, marking the start of public engagement. Following this, a dedicated e-invoicing website was launched in October 2024, providing resources and updates. A data dictionary was released for public consultation in February 2025, allowing stakeholders to provide feedback on the proposed data structure for e-invoices. The recent issuance of Ministerial Decision Nos. 243 and 244, which define the scope and timelines of the e-invoicing system, represented a significant step toward implementation. (For background, see EY Global Tax Alert, UAE Ministry of Finance publishes Ministerial Decisions on e-invoicing, dated 30 September 2025.)

The issuance of CD No. 106, which clarifies the framework for violations and administrative penalties related to the e-invoicing system, brings the UAE closer to full adoption of the system.

Key provisions of CD No. 106

Scope of application

CD No. 106 applies to all persons subject to e-invoicing, excluding persons who issue, transmit, share, exchange or report electronic invoices and electronic credit notes on a voluntarily basis, in line with decisions made under Federal Decree-Law No. 28 of 2022 on Tax Procedures, effective from March 2023.

Enforcement of penalties for e-invoicing violations

Administrative penalties specified in a table annexed to CD No. 106, as presented below, will be imposed for noncompliance with the e-invoicing provisions.

No.

Description of violation

Administrative penalty amount

1

Non-implementation of e-invoicing and failure to appoint an Accredited Service Provider (ASP) within the timeline

AED*5,000 for each month or part of a month delayed

2

Failure to issue and send electronic invoices

AED100 per invoice, capped at AED5,000 per calendar month

3

Failure to issue and send electronic credit notes

AED100 per invoice, capped at AED5,000 per calendar month

4

Failure to inform the FTA of a System Failure (Issuer)

AED1,000 for each day of delay or part thereof

5

Failure to inform the Authority of a System Failure (Recipient)

AED1,000 for each day of delay or part thereof

6

Failure to update the ASP on data changes (Issuer and Recipient)

AED1,000 for each day of delay or part thereof

* The abbreviation AED stands for Arab Emirates Dirham.

Implications

Businesses operating in the UAE should review and update their current invoicing practices as applicable to avoid noncompliance with e-invoicing and potential administrative penalties.

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Contact Information

For additional information concerning this Alert, please contact:

EY Consulting LLC, Dubai

Ernst & Young LLP (United States), Middle East Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2025-2433

 

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