UAE Tax Alert: New E-Invoicing Fines Announced – Are You Compliant?
The landscape of taxation in the UAE is evolving rapidly. As part of the nation’s ambitious drive toward a fully integrated digital economy, the UAE Ministry of Finance has announced a significant Cabinet Resolution regarding the Electronic Invoicing System (EIS).
For businesses operating in the UAE, this is a critical update. New administrative fines have been introduced for non-compliance, aiming to strengthen digital systems and ensure tax transparency.
At Zyla Accountants, as registered FTA Tax Agents with a footprint in both Dubai and the UK, we want to ensure you navigate these changes without penalty. Here is everything you need to know about the new regulations.
Who Needs to Worry?
The new resolution specifically targets entities that are required to implement the EIS under Ministerial Decision No. (243) of 2025.
If your business falls under the mandatory bracket for e-invoicing, strict adherence to the rules is now enforceable by law. However, there is a silver lining for early adopters: Businesses currently using the system voluntarily are exempt from these fines until the system becomes mandatory for them.
The Cost of Non-Compliance
The Ministry has outlined a specific tier of penalties. It is vital to note that some of these fines are capped per month, while others accrue daily, posing a significant financial risk for oversight.
Here is the breakdown of the new administrative fines:
1. Implementation & Setup
The Violation: Failing to implement the Electronic Invoicing System or failing to appoint an approved service provider by the deadline.
The Fine: Dh5,000 per month.
2. Transactional Reporting
The Violation: Failing to issue or send an electronic invoice within the required timeframe.
The Fine: Dh100 per invoice (Capped at Dh5,000 per month).
The Violation: Failing to issue or send an electronic credit note within the required timeframe.
The Fine: Dh100 per note (Capped at Dh5,000 per month).
3. System & Data Communication (High Risk)
The Violation: Failing to notify the Federal Tax Authority (FTA) of system malfunctions.
The Fine: Dh1,000 per day.
The Violation: Delays in informing your approved service provider about changes to registered data.
The Fine: Dh1,000 per day.
Zyla Note: Pay special attention to the "per day" fines regarding system malfunctions and data changes. These can accumulate rapidly, far exceeding the caps placed on missing invoices.
Why the Change?
This isn't just about collecting fines; it is about modernization. UAE officials have stated that this resolution reflects the government’s commitment to international best practices. By enforcing a robust e-invoicing framework, the UAE is reducing the shadow economy, preventing tax evasion, and streamlining business-to-government reporting.
How Zyla Accountants Can Help
Navigating the technicalities of the FTA’s requirements can be complex, especially with cross-border operations between the UK and the UAE.
As your partners and FTA Agents, Zyla Accountants can assist you by:
Assessing your liability: Determining if and when your business falls under the mandatory requirements of Ministerial Decision No. (243) of 2025.
System Implementation: Guiding you toward approved service providers to ensure your tech stack is compliant.
Ongoing Compliance: Managing your reporting to ensure no invoices, credit notes, or data changes slip through the cracks.
Don’t let administrative errors eat into your profits. Ensure your business is ready for the digital future of the UAE.
Contact Zyla Accountants today for a compliance health check.