What is the Recent Amendment to UAE VAT Executive Regulation?

On 12 August 2025, the Ministry of Finance issued Cabinet Decision No. 100 of 2025, amending Articles 59 (Tax Invoices) and 60 (Tax Credit Notes) of the VAT Executive Regulations. The amendments introduce additional provisions specifying the key changes that take effect once e-Invoicing is applied to a business. These amendments, effective from 29 September 2025, establish the UAE’s mandatory Electronic Invoicing (e-Invoicing) framework.

Key Provisions Added:

Article 59 – Tax Invoice

“16. Where a Registrant is required to issue a Tax Invoice in the form of an Electronic Invoice pursuant to Clause 5 of Article 65 of the Decree-Law or where the Registrant issues a Tax Invoice in the form of an Electronic Invoice on a voluntary basis, Clauses 2, 3, 5, 7, 8, 15 of this Article and any other Clause as determined in a decision issued by the Minister shall not apply.”

Article 60 – Tax Credit Note

“8. Where a Registrant is required to issue a Tax Credit Note in a form of an Electronic Credit Note pursuant to Clause 4 of Article 70 of the Decree-Law or where the Registrant issues a Tax Credit Note in the form of an Electronic Credit Note on a voluntary basis, Paragraph (e) of Clause 1, Clauses 2 and 3 of this Article and any other Clause as determined in a decision issued by the Minister shall not apply.”

These changes seek to standardize VAT reporting, strengthen accuracy, and reinforce compliance through the mandatory adoption of electronic invoices and credit notes

What Does This Change Mean for Businesses?
Once a business is integrated into the e-invoicing system whether as part of the mandatory rollout or on a voluntary basis several provisions previously allowed under Articles 59 and 60 will no longer apply:

1. Simplified invoice and credit note formats will no longer be permitted, even for small-value transactions or non-registrant customers.

Previously, businesses could issue simplified invoices for low-value transactions (for example, supplies under AED 10,000) or to non-registrant customers, including services or retail sales. Under the e-invoicing framework, all invoices and credit notes must now include the full set of data fields specified by the FTA, regardless of transaction value or customer type. This ensures consistency, traceability, and audit readiness across all transactions.

1. FTA-approved exemptions or administrative waivers for issuing tax invoices or credit notes will no longer be available.

Businesses could previously apply for FTA approvals to omit certain invoice details or obtain waivers in exceptional cases, such as for bulk transactions or administrative convenience. With the new e-invoicing provisions, these exemptions are no longer valid once a business issues an electronic invoice or credit note. Every e-invoice must comply fully with the standard schema defined by the FTA, removing discretionary reliefs.

1. Issuing tax invoices will now be mandatory for wholly zero-rated supplies, ensuring completeness of VAT documentation.

In the past, a business supplying fully zero-rated goods or services could, in some cases, rely on internal records without issuing a tax invoice. With the amendments, every zero-rated supply must be documented through a tax invoice, ensuring a complete audit trail. For example, a company exporting goods under a zero-rate regime must now generate a full e-invoice for each shipment, capturing all required fields, even though no VAT is charged.

In summary, the amendments remove the optional flexibility in invoice issuance and make compliance with the e-invoice schema mandatory, replacing manual or simplified formats with standardized electronic documents.

Practical Implications for e-Invoicing framework for Businesses

1. Mandatory e-Invoice Compliance: All invoices and credit notes issued electronically must contain the full set of data fields required by the FTA.
2. System Preparedness: Accounting and invoicing systems must be configured to generate and store electronic invoices securely, ensuring authenticity and integrity.
3. Record Keeping: Businesses must maintain proper electronic records in accordance with the e-invoicing requirements, facilitating audit and compliance checks.
4. Removal of Exceptions: Previous administrative approvals or waivers that allowed omission or simplification of invoice details are no longer valid once e-invoicing is used.

The Cabinet Decision ensures that all VAT-registered businesses move toward standardized digital VAT reporting, improving accuracy, transparency, and compliance. Businesses should review their invoicing processes and systems to align with the e-invoicing schema, whether they are onboarded voluntarily or mandatorily.

For any questions or clarifications regarding these amendments and e-invoicing compliance, our in-house VAT experts are available to provide guidance and support.