UAE E-Invoicing Is Here. Is Your Business Ready?

**Tim Elliott** (0:00)
This is the Morning Drive, it's Mira Business FM. A major shift hitting UAE businesses today, actually. It's the launch of the mandatory e-invoicing pilot. Full compliance is required by 2027 But what do these changes mean for your bottom line? Joining us is Nils Vanhassel. He's head of tax for the Middle East at Addleshaw Goddard. So hopefully we can break down the new rules, look at the regional landscape, and any immediate next steps people need to make. I think, Nils, good to meet you. Good to have you here.

**Nils Vanhassel** (0:33)
Good morning, Elliott. Thanks for having me.

**Tim Elliott** (0:35)
Appreciate having you. So we've seen the headlines. It's an important milestone, I think, for businesses here. Why is the UAE making this leap to e-invoicing now?
And I guess we need to frame this as, it's a pretty big compliance shift as well, isn't it?

**Nils Vanhassel** (0:52)
It is, it is. And so the UAE actually announced that they were gonna implement e-invoicing about two years ago. So if businesses have been following the news, they know that this is coming. But typically, the story is that it's mostly the larger businesses that are ready for this, and they've done implementations in other countries, in Europe, in Saudi Arabia. But it's really the smaller businesses that are sort of at risk of being left out. So they really need to know what's coming at them. But I would say in terms of the global trends in e-invoicing is that it's really being rolled out now across different jurisdictions, also in the Middle East and definitely across Europe as well.

**Tim Elliott** (1:29)
Yeah, I mean, it's standard, isn't it? So we're recording this on July 1st, 2026 The pilot phase has kicked off, as I said. For businesses not currently in the selected group, if you like, is this a time for like, wait and see? Or are you already, are they already in the danger zone if they haven't started, you know, internal assessments?

**Nils Vanhassel** (1:50)
No, like you said, Elliott, so today is the start of the pilot phase. So what does that mean? It means that the system is now live, and you can now send electronic invoices through the Pepple network, which is live since today.
The pilot phase is really only relevant for two categories of business. So the Ministry of Finance has invited a select working group of taxpayers to participate in the pilot phase, and obviously that is just to do general testing of the system, see if everything works correctly. But if you are already ready today with your invoicing solution, so you have gone through the necessary steps to go ahead and implement that, then you can actually participate now on a voluntary basis. And I would say businesses are actually encouraged to do so, because now you are not at risk of incurring any penalties. So you are still way ahead of the mandatory deadline, which the first one is on the 1st of January. So if you actually are in a position to go ahead and send some e-invoices, then businesses should generally do so.

**Tim Elliott** (2:49)
Okay, so if you are a chief financial officer and you are relying on manual or PDF based invoicing, whatever, what are the first things you need to be doing now to avoid their monthly admin penalties, I believe, coming in 2027? But what do you need to do to prepare?

**Nils Vanhassel** (3:05)
Right. So the penalties is actually an interesting point, because it's relevant. It might have a huge financial impact on businesses. So the rollout is basically based on revenue.
So it depends on whether you're above or below 50 million dirhams.
If you're above that threshold, then you need to be live on the 1st of January. If you're below that threshold, then you look at the 1st of July of next year. If you go beyond that date and you're not ready with your e-invoicing solution, then there's monthly penalties of 5,000 dirhams. So that's something to look at. If you're looking today and you hear about e-invoicing in the pilot phase for the 1st time, there's a few steps that you should go through. So first of all, is check your revenue, which you have to look at your financial statements of last year. If you're a new business, you'll work on projected revenue. If you're a new company, just incorporate, you don't have financial statements yet. So that's the 1st step. Based on that revenue, you'll then determine, when is my mandatory go live? Am I looking at January or July next year?
Then once you've done that, there's something that you need to do called transaction mapping, where you basically look at your business and you see what kind of transactions am I mostly involved in? Do I mainly have local customers? Do I have international customers? Because that will then map sort of the VAT treatment and the type of e-invoices that you're going to send out. There's also a gap analysis that you have to do where you basically, you look at your customer data, your vendor data. Do I have all the right information about my clients and vendors? That relates to things like tax registration numbers, address details. If you don't have those fields ready to go, then that could potentially lead to invoices being rejected further down the line.