United Arab Emirates and e-invoicing framework - phase 1: July 1, 2026

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vlag UK

The United Arab Emirates (UAE) has significantly advanced digital tax reform with the publication of a Public Consultation Document on February 6, 2025.

This document details the proposed e-invoicing framework to enhance tax compliance, transparency, and efficiency through Peppol-based real-time Continuous Transaction Controls (CTC) and a PEPPOL-based 5-Corner Model.

This initiative represents a significant transformation in how businesses manage tax reporting and invoicing. By adopting near real-time reporting systems, the UAE is aligning itself with international trends in digital taxation. The initial implementation phase will exclude B2C transactions, allowing for a concentrated focus on business-to-business (B2B) and business-to-government (B2G) transactions.

As the UAE approaches its 2026 implementation deadline, businesses need to start preparing for a shift from conventional invoicing practices to fully digital and structured invoice exchanges. This article offers a comprehensive overview of the system, its scope, the implementation framework, and the 16 invoicing scenarios that businesses should familiarize themselves with.

The e-invoicing framework in the UAE aims to enhance tax compliance and address the inefficiencies linked to manual tax reporting processes. This system is based on a Decentralized Continuous Transaction Control and Exchange (DCTCE) Model, facilitating real-time validation and smooth invoice exchange among various stakeholders.

The United Arab Emirates has implemented a PEPPOL-based 5-Corner Model, a globally acknowledged framework for the structured exchange of invoices. This model creates a uniform communication network that connects suppliers, buyers, service providers, and tax authorities.

Timeline & Business Preparation

Significant Milestones

  • Q4 2024 – Commencement of the accreditation process for service providers in the UAE.
  • Q2 2025 – Publication of the final technical documentation and regulatory framework.
  • July 2026 – Launch of Phase 1 for compliance with e-Invoicing.

The e-invoicing framework in the UAE applies to all enterprises operating within the nation, regardless of their VAT registration status. However, it is essential to note that B2C transactions are not included in this initial phase.

Do you know who is required to Comply?

  • Businesses that are VAT-registered and participate in B2B and B2G transactions must comply.
  • Non-VAT registered entities engaged in taxable activities in the UAE are also subject to this requirement.
  • Foreign companies conducting taxable transactions within the UAE must follow the framework.
  • Businesses operating in Free Zones that are involved in taxable transactions are obligated to issue e-invoices.

KGT is a SAP partner for PE services and SAP Build partner, and to become an SAP partner, strict due diligence requirements must be met, including having certified SAP consultants. You can find us at: https://partnerfinder.sap.com/profile/0001925409

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Roadmap to Tax and IT function effectiveness

KGT SAP add-ons for SAF-T, e-invoicing and MTD UK for VAT work as a standalone application within the SAP system and do not change existing customer SAP functionality or processes. It is fully configurable with a custom namespace /KGT.

KGT partnered up with SAP regarding 'SAP Advanced Compliance Reporting for SAP HANA'. The 'Advanced Compliance Reporting' (ACR) service enables you to configure, generate, analyze, and electronically submit statutory reports that contain indirect taxes, such as value-added tax.

KGT also provides S/4 HANA transformation support.

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