UAE E Invoicing Guidelines Updated to Version 1.1

The guidelines confirm that businesses subject to the Electronic Invoicing System must:

• Retain electronic invoices, electronic credit notes and associated data for the statutory periods under the Tax Procedures Law and its Executive Regulation.
• Preserve the integrity of these records so they remain complete and unaltered.
• Ensure secure retention, with adequate controls over access and modification.
• Be able to retrieve and provide complete, readable records promptly upon request from the Federal Tax Authority.

Even if storage is delegated to an ASP or another service provider, ultimate responsibility for satisfying these requirements remains with the taxable person or business.

Appendix 4 and the related guidance clarify that ASPs are expected to:

• Maintain transaction logs for each invoice and credit note processed through their systems.
• Ensure that these logs adequately evidence processing, transmission and validation steps for each document.

These logs are key to ensuring end to end auditability of the e invoicing process. Businesses should ensure that ASP contracts expressly address how long logs are retained, how they are accessed, and how ASPs will support responses to FTA queries.

Appendix 4 explains that the requirement to store records “within the State” is met where:

• Electronic invoices, credit notes and associated data can be retrieved, reproduced and provided to the FTA in a complete and readable form, regardless of where the underlying servers or databases are physically located.

This means that cloud based or offshore hosting models can be compliant, provided that:

• Data integrity and security are maintained; and
• The business can provide full access to requested records within the statutory retention period.

Appendix 4 also refines the concept of “associated data”:

• It is limited to information needed to support the integrity, authenticity and auditability of an electronic invoice or credit note.
• It does not automatically include all commercial or transactional documentation (such as full contract files or general correspondence), unless such material is specifically required to validate the completeness and accuracy of the invoice record.

This allows businesses to design retention policies that are proportionate and focused on data genuinely relevant to e invoicing compliance.

The guidelines clarify that where VAT becomes due on receipt of an advance:

• A Tax Invoice must be issued in the form of an Electronic Invoice at the time the advance is received.

In practice, when a business receives an advance for a taxable supply, it is required to issue an electronic Tax Invoice through the Electronic Invoicing System at that point, rather than waiting for the final invoice. This confirmation removes ambiguity and reinforces the principle that e invoicing follows VAT law on timing.

Appendix 5 further explains how to handle the final invoice once an advance has been invoiced:

• The final electronic invoice should cover only the remaining balance of the consideration, not the full contract value.
• The final invoice should reference the original advance invoice, signalling that VAT on the advance has already been accounted for.

From a technical perspective, Appendix 5 explains how to use specific PINT AE fields (such as a preceding invoice reference and paid amount fields) to:

• Link the final invoice to the advance invoice; and
• Show amounts already invoiced and paid.

This guidance is particularly important for ERP configuration and helps avoid double taxation and reconciliation issues across advance and final invoices.

Appendix 5 also addresses the treatment of contractual retention amounts, which is especially relevant for construction and long term projects.

The guidelines acknowledge the commercial complexity of retention and confirm that:

• Businesses may continue their existing invoicing and accounting practices for contractual retention, provided those practices comply with the VAT Law and Executive Regulation.

The introduction of e invoicing does not require a fundamental redesign of valid, VAT compliant retention structures; it clarifies how they should be reflected in electronic documentation.

Appendix 5 sets out how retention should be reflected in electronic invoices:

• For progress or interim billings, electronic invoices may be issued for amounts payable after deduction of retention (i.e. the net amount actually due at that stage).
• When the retention amount becomes due and payable (for example, upon project completion or after the defects liability period), a separate electronic Tax Invoice should be issued for that retention amount.

The guidelines note that the detailed calculation and contractual mechanics of retention typically sit outside the invoice document itself, in project systems or contract schedules. The Electronic Invoice is used to document the amounts that become due at each stage, including the release of retention.