00:00The 2025 e-invoicing rollout in the UAE.
00:03The UAE government has taken steps to move towards a fully digitized tax system by adopting e-invoices.
00:10The e-invoicing process will be mandatory for all business-to-business, B2B, and business-to-government, B2G transactions,
00:19regardless of the VAT registration status of the entities involved.
00:23E-invoice means an electronic invoice that is generated in a particular format and is directly linked to a central database.
00:32The invoice data will be issued and exchanged electronically between a supplier and buyer through an accredited service provider.
00:39The UAE government is working towards implementing e-invoicing throughout the country,
00:43with a view to digitize the invoicing systems and execute real-time tax reporting to the UAE Federal Tax Authority, FTA.
00:51This process seeks to simplify, standardize, and automate the exchange of invoices.
00:57Advantages of adopting e-invoicing
00:591. The new process is predicted to decrease invoice processing costs by 66%,
01:04as seen in other countries that have adopted e-invoicing correctly.
01:082. Due to the validations and controls built within the automation system,
01:13this new process will reduce errors and deliver invoices at a much higher pace.
01:17This will ensure faster payments and better capital flow to the business.
01:223. The new system will make it easier to analyze data regarding every aspect of invoicing,
01:27which can be used to study and improve flaws in the business plan.
01:314. Government-imposed e-invoicing process will push small businesses in the UAE to adopt and adapt to digitization.
01:40They will be able to gain access to the latest technologies at an affordable price,
01:43enabling them to be at a level playing field with larger businesses.
01:475. The submission of data in near real-time with e-invoicing will simplify compliance.
01:53According to the Ministry of Finance,
01:55apart from the clear advantages of implementing e-invoicing,
01:58the new process will minimize intentional and unintentional leakages in VAT submission,
02:03which is an important revenue for the government,
02:06and which has contributed towards key infrastructure developments in the country.
02:09The UAE government amended certain provisions in Federal Decree Law No. 8-2017
02:14on value-added tax through Federal Decree Law No. 16-2024
02:19to adapt to the future e-invoicing rollout.
02:23The amendment has altered the definition of tax invoice, tax credit note, and non-resident.
02:28Certain new words and definitions were added,
02:30such as e-invoicing system, electronic invoice, and electronic tax credit note.
02:35As per the amendment, in addition to the documentation and intention-to-pay conditions,
02:42a new condition has been incorporated for the purpose of input VAT recovery.
02:46Here, the taxable person is required to retain the tax invoice
02:49in accordance with the e-invoicing system when it is required to be issued
02:54or is issued in electronic format.
02:57Additionally, the newly added Articles 65 and 70
03:01states that a taxable person who is subject to the e-invoicing system
03:05should issue an electronic tax invoice
03:07or an electronic tax credit note, as the case may be.
03:11UAE has adopted a decentralized five-corner e-invoicing model.
03:16The Decentralized Continuous Transaction Control and Exchange
03:19DCTTCE model
03:21uses the PEPOL AS4 protocol.
03:24Next are the step-by-step process in the e-invoicing model
03:27involving a supplier, buyer, accredited service provider, and the federal tax authority.
03:321. The supplier, C1, sends the e-invoice data to the accredited service provider, C2.
03:40Unstructured invoice formats, such as PDF, Word document, images, scanned copies, and emails
03:46are not e-invoices.
03:47E-invoices must be in XML format.
03:502. C2 validates the e-invoice data
03:52and transmits it to the buyer's accredited service provider, C3.
03:57If the invoice data is not in the standardized XML format,
04:01C2 converts the data into the said format before sending the same to C3.
04:063. C3 sends an acknowledgement to C2 regarding the receipt of the invoice
04:10and transmits the e-invoice to the buyer, C4.
04:144. C2 reports the data in the invoice to the central data platform managed by the FTA, C5.
04:205. C5 sends an acknowledgement to C2 regarding the receipt of the invoice data.
04:256. C2 forwards the acknowledgement by C5 and C3 to C1.
04:30The Ministry of Finance has updated all the information regarding the e-invoicing rollout
04:34planned for 2025 in its website through a designated page.
04:39The e-invoicing process will improve efficiency, transparency, and accessibility,
04:44allowing UAE businesses to engage seamlessly with the data generated by the system.
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