The UAE has introduced an updated framework of administrative penalties for violations of its Electronic Invoicing System. Under Cabinet Decision No. 173 of 2026, businesses may face financial penalties for failing to implement the system, issue and transmit electronic invoices and credit notes, or notify their Accredited Service Provider (ASP) of changes to registered information.

The decision outlines the penalties applicable to issuers and recipients of electronic invoices and highlights the importance of meeting the UAE’s e-invoicing requirements.

Published: 2 November 2026 | Category: Tax Updates & Compliance

Understanding Cabinet Decision No. 173 of 2026

Cabinet Decision No. 173 of 2026, titled On the Violations and Administrative Penalties Resulting from Violation of the Legislation Regulating the Electronic Invoicing System, establishes the administrative penalties applicable to violations of the UAE’s e-invoicing legislation.

The decision applies to violations under Federal Decree-Law No. 28 of 2022 and its relevant implementing decisions.

It also replaces Cabinet Decision No. 106 of 2025, which previously addressed violations and administrative penalties relating to the Electronic Invoicing System.

The decision identifies penalties for four main categories of non-compliance, covering system implementation, invoice issuance, credit note issuance, and notification of changes to registered information.

Failure to Implement the Electronic Invoicing System

Businesses that fail to implement the Electronic Invoicing System in accordance with the applicable requirements may face an administrative penalty.

Under the decision, the penalty is AED 5,000 for the first instance of non-compliance.

Where the violation continues, an additional AED 5,000 applies for each month or part of a month during which the business remains non-compliant. The total penalties are capped at AED 50,000 within any 12 consecutive months.

This includes failure to appoint an Accredited Service Provider where required under Ministerial Decision No. 244 of 2025.

The decision also addresses recipients who fail to maintain their obligations under Ministerial Decision No. 243 of 2025.

Businesses should therefore ensure that the required arrangements are in place and that their e-invoicing responsibilities are being maintained.

Failure to Issue and Transmit Electronic Invoices

Issuers are required to issue and transmit electronic invoices in accordance with the applicable e-invoicing requirements.

Failure to do so may result in a penalty of AED 100 for each electronic invoice that is not issued and transmitted.

The total penalty for this violation is capped at AED 5,000 per calendar month.

Businesses should review their invoicing procedures and ensure that transactions requiring electronic invoices are properly recorded, issued, and transmitted through the required system.

Failure to Issue and Transmit Electronic Credit Notes

The decision also establishes a separate penalty for failing to issue and transmit electronic credit notes.

An issuer that fails to meet this obligation may face a penalty of AED 100 for each electronic credit note that is not issued and transmitted.

The total penalty is capped at AED 5,000 per calendar month.

Businesses should ensure that adjustments requiring credit notes are properly reflected in their invoicing processes and that the relevant electronic credit notes are issued and transmitted in accordance with the applicable requirements.

Failure to Notify the Accredited Service Provider of Changes

Businesses may also face penalties if they fail to notify their appointed Accredited Service Provider of changes to information registered with the Authority.

Under Cabinet Decision No. 173 of 2026, the penalty is AED 250 for each day of delay or part thereof, subject to a maximum of AED 5,000 per calendar month.

This requirement highlights the importance of keeping registered information accurate and ensuring that relevant changes are communicated to the appointed ASP.

Businesses should establish internal procedures to identify changes to their registered information and notify their ASP within the applicable timeframe.

What Businesses Should Review

Following the issuance of Cabinet Decision No. 173 of 2026, businesses should review their current invoicing processes and assess whether they are prepared to meet the applicable e-invoicing requirements.

The following areas should be considered:

• Confirm whether the business is required to implement the Electronic Invoicing System.
• Appoint an Accredited Service Provider within the applicable timeframe.
• Review system integration and ensure electronic invoices and credit notes can be issued and transmitted correctly.
• Check internal procedures for handling invoice adjustments and credit notes.
• Keep registered business information accurate and notify the appointed ASP of relevant changes.
• Review the responsibilities of the business as both an issuer and recipient of electronic invoices.
• Maintain appropriate records and supporting documentation.

Businesses should also review the relevant Ministerial Decisions to understand the specific obligations applicable to their role within the Electronic Invoicing System.

What This Means for UAE Businesses

Cabinet Decision No. 173 of 2026 reinforces the importance of implementing and maintaining compliance with the UAE Electronic Invoicing System.

The penalties extend beyond the initial implementation stage. Businesses must also ensure that invoices and credit notes are issued and transmitted correctly and that changes to registered information are communicated to their appointed ASP.

For companies preparing for e-invoicing, addressing these requirements early can help reduce the risk of non-compliance and avoid unnecessary administrative penalties.

Conclusion

Cabinet Decision No. 173 of 2026 establishes clear administrative penalties for businesses that fail to meet their obligations under the UAE Electronic Invoicing System.

With penalties covering system implementation, electronic invoice and credit note issuance, and notification requirements, businesses should take the necessary steps to review their processes and ensure that their e-invoicing arrangements meet the applicable requirements.

Preparing in advance and maintaining proper compliance procedures can help businesses avoid penalties and support a smoother transition to the UAE’s Electronic Invoicing System.

Disclaimer: This article is for general informational purposes only and does not constitute tax or legal advice. The applicable UAE legislation and official guidance should be consulted when assessing individual business circumstances.

Official Reference

• UAE Legislation – Cabinet Decision No. 173 of 2026