The UAE is rolling out its new eInvoicing programme in 2024 as part of its vision to become a digitally-enabled, paperless economy. This initiative not only aims to streamline and modernize invoicing processes but also to foster transparency, improve audits, and enhance taxpayer compliance across the country.
What is eInvoicing?
Electronic invoicing (eInvoicing) is the process of exchanging invoice documents in a structured electronic format between suppliers and buyers, which enables automatic and seamless processing. Unlike traditional formats like PDFs, paper invoices, or images, eInvoices must follow specific structural guidelines, allowing them to be issued, transmitted, and received through integrated electronic systems.
UAE eInvoicing Programme: Key Objectives and Benefits
The UAE eInvoicing Programme 2024 is pivotal in driving the nation toward a fully digital, paperless economy. This initiative enhances Federal Government revenue collection by addressing tax gaps and minimizing evasion, creating a level playing field and improving the ease of doing business across the UAE.
Key objectives include:
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Effectiveness
Increase transparency and improve auditing processes, which in turn cultivates a stronger compliance culture among taxpayers.
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Digitisation
By reducing the need for manual intervention, the programme advances the UAE’s fiscal ecosystem toward complete digital enablement.
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Economic Contribution:
The eInvoicing initiative is expected to drive economic growth, enhance competitiveness and leverage big data.
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Enhanced Taxpayer Experience:
The programme is designed to improve the experience for taxpayers by making processes more user-friendly, automated, and efficient.
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Efficiency
With optimized cost structures, reduced processing times, and less reliance on paper, the programme supports sustainability goals and operational efficiency.
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Compliance
A key focus is on reducing the tax gap by maximizing compliance and addressing the shadow economy.
The UAE eInvoicing Model: A Decentralized Approach
The UAE has adopted the Decentralized Continuous Transaction Control and Exchange (DCTCE), or the “5-corner” model. This model involves five critical components, from the supplier and buyer to accredited service providers (SPs) who validate, transmit, and secure invoice data.
Key steps in the eInvoicing process include:
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Send
The supplier enters the invoice data into their system through OpenPeppol Accredited Service Provider.
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Validate and Transmit
The SP validates the invoice data and transmits it to the buyer’s SP. The sending SP confirms buyer details through the OpenPeppol directory for secure delivery.
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Collect & Deliver
The receiving SP sends the invoice data to the buyer’s business software.
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Receive
The buyer’s business software receives the invoice data from their SP in the specified format.
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Collect & Store
UAE Accredited SPs can send an extract of the invoice data to a central data platform managed by the Federal Tax Authority.
UAE eInvoicing Framework
- Decentralized Continuous Transaction Control and Exchange (DCTCE) / 5 corner model
- Peppol Network Usage
- Peppol International (PINT) as UAE Data Dictionary
- Mandatory B2B and B2G
- Establishment of the UAE Peppol Authority Committee
What Businesses Need to Know
The UAE eInvoicing programme will initially require businesses to understand the eInvoicing process and select an accredited service provider to implement the system. Here are the necessary steps for taxpayers:
- Understand eInvoicing Requirements.
- Choose a Certified Service Provider (SP).
- Implementing einvoicing with the selected SP.
- Selected SP conducts testing to verify eInvoice creation, validation, and submission.
- Selected SP automates eInvoice exchange between suppliers and buyers, ensuring accurate tax data reporting to the FTA.
- Leveraging the eInvoicing system for optimized business process and cost-efficient invoice production.
UAE eInvoicing Programme: High-Level Timelines
The UAE eInvoicing implementation will follow a phased approach with key milestones:
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Q4 2024
Development of Accreditation Requirements for Service Providers (SPs) and the UAE Data Dictionary.
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Q2 2025
Enactment of eInvoicing legislation to establish the legal framework and obligations for businesses and SPs.
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July 2026
Phase 1 Go-live for reporting requirements.
