The Ministry of Finance has issued Cabinet Decision No. 106 of 2025, which sets out administrative fines for non-compliance with the UAE’s new Electronic Invoicing System (EIS).
Background:
Cabinet Decision No. 106 of 2025 builds on the framework introduced by Ministerial Decision No. 243 of 2025, which established the Electronic InvoicingNo. 244 of 2025, which set the implementation timelines. Both Ministerial Decisions were issued in September 2025.
The Cabinet Decision, issued in October 2025, completes the framework by setting out the violations and administrative penalties that will apply. Together, these measures support the UAE’s transition towards a fully digital and transparent tax environment.
The penalty regime applies to all businesses that are required to implement the EIS, entities that adopt the system voluntarily will not be penalised until they fall within the mandatory scope.
Key fines include the following:
- AED 5,000 per month (or part thereof) for failing to implement the Electronic Invoicing System or failing to appoint an Accredited Service Provider within the required timeframe
- AED 100 per electronic invoice that is not issued or transmitted on time, capped at AED 5,000 per calendar month for invoices
- AED 100 per electronic credit note, with a separate cap of AED 5,000 per calendar month for credit notes
- AED 1,000 per day (or part day) for an issuer who fails to notify the Federal Tax Authority (FTA) of a system failure within the prescribed timeline
- AED 1,000 per day (or part day) for a recipient who fails to notify the FTA of a system failure
- AED 1,000 per day (or part day) for failing to inform the appointed Accredited Service Provider of changes to the registered data
The introduction of this penalty regime signals a clear move from preparation to enforcement. Businesses should ensure that their systems are fully integrated with the Electronic Invoicing System, that their processes meet the Federal Tax Authority’s requirements, and that their internal teams understand the operational steps involved. These measures position the UAE for a more efficient and modern tax framework as the country enters 2026.
Our legal team would be pleased to assist you in understanding the implications of these developments and their relevance to your business. You are welcome to reach out to Mamdouh Tawfik at m.tawfik@alsuwaidi.ae,Vida Grace Serrano at vida@alsuwaidi.ae and Suneer Kumar at suneer@alsuwaidi.ae.