UAE Cabinet Decision defines key terms & penalties for breaches
The UAE Cabinet has issued Cabinet Decision No. 106 of 2025 on violations and administrative penalties related specifically to the new e-invoicing system.
On 29 Sept 2025, the Ministry published its e-invoicing Framework. Aside from e-invoicing, the mandate include separate e-reporting to the UAE Federal Tax Authority within days of e-invoice.
It legally defines the core concepts for the regime:
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Electronic Invoice / Electronic Credit Note: must be issued, sent and received in a structured electronic format that allows automatic electronic processing and complies with the official e-invoicing system.
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Issuer: any person required to issue, transmit, share and exchange electronic invoices/credit notes via the system.
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Recipient: any person required to receive electronic invoices/credit notes via the system.
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System Failure: any technical malfunction or unavailability of the e-invoicing system that prevents issuers or recipients from meeting their obligations.
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Scope and those using voluntary e-invoicing:
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The decision applies to breaches of the legislation regulating the Electronic Invoicing System, under the Tax Procedures Law (Federal Decree-Law No. 28 of 2022).
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It does not apply to taxpayers who use e-invoicing purely on a voluntary basis under decisions issued pursuant to that law.
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Penalties, including not appointing service provider:
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A table of specific administrative penalties is annexed to the decision; these cover failures such as not implementing the e-invoicing system on time, not issuing/transmitting e-invoices or e-credit notes on time, and failing to notify the FTA or the accredited service provider of system failures or registration changes.
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For example, failure to implement the e-invoicing system (including appointing an accredited service provider in time) can attract AED 5,000 per month or part thereof, and late issuance of e-invoices/e-credit notes can attract AED 100 per document, capped at AED 5,000 per month.
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