With the release of the UAE E-Invoicing Programme 2024 document from the Ministry of Finance, certainty has been established on the E-Invoicing implementation and timelines in the Country.

Key highlights from the document:

Introduction to E-Invoicing: Structured electronic invoicing enables seamless exchange and automatic processing, excluding unstructured formats like PDFs and scanned images. E-Invoices need to be created with correct structure and transferred from seller’s to buyer’s system.

Global Context: E-Invoicing is on the rise globally, with over total 550 billion invoices issued in 2023. Of these, 108 billion were digital, reflecting an annual growth rate of 20%.

Key Objectives:

• Promote a paperless, modern digitally enabled fiscal environment.
• Drive economic growth and operational efficiency.
• Increase transparency and compliance.
• Streamline the taxpayer (who have obligation to issue E-Invoice) experience and reduce tax gaps and evasion.

UAE E-Invoicing Model: Adopts a decentralized, 5-corner Continuous Transaction Control and Exchange model (DCTCE), using the Peppol network for interoperability and secure transactions via accredited service providers (ASP). Key features of this model:

• Decentralized Structure: Instead of relying on a single, central platform, it allows transactions to occur between multiple authorized service providers.
• Continuous Transaction Control: It provides real-time validation and monitoring of transactions. Each invoice is checked for compliance with specified standards before it’s transmission.
• 5-Corner Model:
  • Supplier (Corner 1): Initiates the invoice in their business software.
  • Supplier’s Service Provider (Corner 2): Validates and transmits the invoice.
  • Customer’s Service Provider (Corner 3): Receives and processes the invoice data.
  • Customer (Corner 4): Receives the validated invoice in their system.
  • Federal Tax Authority (FTA) (Corner 5): Collects and stores key data from the invoice via accredited providers.
• Peppol Network Integration: The model leverages the Peppol network, which is widely used for electronic data exchange in international trade, ensuring compatibility with global standards.

Coverage and Required Actions for Taxpayer:

For all B2B and B2G transactions, taxpayers must:

• Understand data requirements.
• Select and contract a certified service provider.
• Test and integrate eInvoice validation processes.
• Optimize business processes for cost-effectiveness.

High Level Implementation Timeline :

• Q4 2024: Development of accreditation standards and UAE Data Dictionary.
• Q2 2025: Expected release of eInvoicing legislation.
• July 2026: Reporting phase to go live.

This document underscores the UAE’s commitment to a transparent, efficient, and digital-first economic ecosystem, setting the stage for a modernized approach to fiscal management.