Cabinet Decision No. 173 of 2026 

UAE revises violations and administrative penalties for the Electronic Invoicing System

The UAE Cabinet has issued Cabinet Decision No. 173 of 2026 on the Violations and Administrative Penalties resulting from Violation of the Legislation Regulating the Electronic Invoicing System.

The new Decision repeals Cabinet Decision No. 106 of 2025 and revises the penalty framework applicable to UAE e-invoicing. The changes are particularly relevant to businesses preparing for mandatory implementation, as the new framework expressly expands certain obligations to r

ecipients, introduces a continuing-compliance concept and changes the mechanics and caps applicable to certain penalties.

1. Failure to implement the Electronic Invoicing System

Under Cabinet Decision No. 106 of 2025, failure by an Issuer to implement the Electronic Invoicing System, including failure to appoint an Accredited Service Provider within the prescribed timeline, attracted a penalty of AED 5,000 for each month or part thereof.

Cabinet Decision No. 173 of 2026 revises this approach. The violation now expressly applies to an Issuer or Recipient that fails to implement the Electronic Invoicing System in accordance with Ministerial Decision No. 244 of 2025 and its amendments, or any replacement decision. This continues to include failure to appoint an Accredited Service Provider.

The revised penalty is AED 5,000 for the first instance and AED 5,000 for each month or part thereof during which non-compliance continues, subject to a maximum total fine of AED 50,000 within any period of 12 consecutive months.

The introduction of the AED 50,000 cap provides greater certainty around accumulated exposure while the express inclusion of Recipients broadens the population potentially subject to the implementation penalty.

2. New focus on ongoing Recipient compliance

A significant addition is the express treatment of ongoing Recipient obligations. Where a Recipient has implemented the Electronic Invoicing System but subsequently fails to maintain compliance with its obligations as a Recipient in accordance with Ministerial Decision No. 243 of 2025 and its amendments, or any replacement decision, the Recipient may be subject to the same penalty framework described above.

Businesses should therefore view Recipient readiness as an ongoing compliance requirement, rather than a one-time implementation exercise.

3. Electronic Invoice penalties remain unchanged

Failure by an Issuer to issue and transmit an Electronic Invoice to the Recipient through the Electronic Invoicing System remains subject to AED 100 for each Electronic Invoice, up to a maximum of AED 5,000 per calendar month.

While the penalty amount remains unchanged, the wording in Decision No. 173 no longer expressly refers in the penalty table to the timeline prescribed by the Minister.

4. Electronic Credit Note penalties remain unchanged

Failure by an Issuer to issue and transmit an Electronic Credit Note to the Recipient through the Electronic Invoicing System remains subject to AED 100 for each Electronic Credit Note, up to a maximum of AED 5,000 per calendar month. The financial exposure therefore remains consistent with the previous Decision.

5. Lower penalty for failure to communicate changes to registered data

Under Decision No. 106 of 2025, failure to notify the appointed Accredited Service Provider of changes to data registered with the Authority attracted AED 1,000 for each day of delay or part thereof.

Under Decision No. 173 of 2026, the penalty is reduced to AED 250 for each day of delay or part thereof, up to a maximum of AED 5,000 per calendar month. This represents both a reduction in the daily penalty and the introduction of an express monthly cap.

6. System Failure notification violations removed from the penalty table

Decision No. 106 of 2025 contained separate violations for failure by an Issuer and failure by a Recipient to notify the Authority of a System Failure within the prescribed timeline. Each attracted AED 1,000 for each day of delay or part thereof.

These violations do not appear in the penalty table annexed to Decision No. 173 of 2026. Businesses should distinguish the removal of these items from the administrative penalty table from the underlying operational or regulatory requirements that may otherwise apply under the broader e-invoicing framework.

7. One penalty for the same violation

Decision No. 173 introduces an additional rule addressing circumstances where the same Person acts as an Issuer, Recipient or both. Where those roles relate to the same violation, only one administrative penalty for that violation is to be imposed on that Person under the Decision.

Practical implications for businesses

Implementation readiness: Confirm the applicable implementation obligations and timelines and ensure an Accredited Service Provider is appointed as required.

Recipient readiness: Assess Recipient-side processes independently from Issuer processes. The new Decision expressly brings implementation and continuing Recipient compliance into the penalty framework.

Ongoing compliance: Establish controls to ensure compliance continues after initial onboarding and implementation, particularly for Recipient obligations.

Master-data governance: Introduce procedures for identifying changes to data registered with the Authority and communicating those changes promptly to the appointed Accredited Service Provider.

Invoice and credit note controls: Validate that Electronic Invoices and Electronic Credit Notes are issued and transmitted through the Electronic Invoicing System in accordance with the applicable requirements.

Penalty monitoring: Update internal compliance matrix to reflect the new AED 50,000 rolling 12-month cap and the AED 5,000 monthly cap for delayed data-change notifications.

Key takeaway

Cabinet Decision No. 173 of 2026 represents a recalibration of the UAE e-invoicing penalty framework rather than simply an increase in penalties. The revised regime places greater emphasis on Recipient implementation and continuing compliance, while introducing clearer caps on accumulating penalties and reducing the daily penalty applicable to delayed notification of changes to registered data.