UAE e-invoicing penalties, with worked examples.

UAE e-invoicing penalties are set by Cabinet Decision No. 106 of 2025, which took effect on 15 October 2025. There are six. The most expensive is AED 5,000 for each month, or part of a month, that a business fails to implement e-invoicing, including failing to appoint an Accredited Service Provider (ASP) on time. Late e-invoices and e-credit notes cost AED 100 each, capped at AED 5,000 a month. Late notices cost AED 1,000 a day. None of them apply before your mandatory date.

This page covers penalties only. For dates, scope and how the system works, start with our overview of UAE e-invoicing for SMEs.

The six penalties

This is the annexed table of Cabinet Decision No. 106 of 2025, in plain English.

No.	What went wrong	Penalty
1	The issuer fails to implement the system, including failing to appoint an ASP on time	AED 5,000 for each month or part of a month of delay
2	The issuer fails to issue and transmit an e-invoice on time	AED 100 per e-invoice, up to AED 5,000 per calendar month
3	The issuer fails to issue and transmit an e-credit note on time	AED 100 per e-credit note, up to AED 5,000 per calendar month
4	The issuer fails to notify the FTA of a system failure on time	AED 1,000 for each day or part of a day of delay
5	The recipient fails to notify the FTA of a system failure on time	AED 1,000 for each day or part of a day of delay
6	The issuer or recipient fails to tell its ASP about changes to its FTA-registered data on time	AED 1,000 for each day or part of a day of delay

The deadlines behind each penalty

A penalty only makes sense next to the deadline it enforces. These come from Ministerial Decisions No. 243 and No. 244 of 2025, as amended.

Duty	Deadline
Appoint an ASP, revenue below AED 50,000,000	31 March 2027, going live by 1 July 2027
Appoint an ASP, revenue of AED 50,000,000 or more	30 October 2026, going live by 1 January 2027
Issue and send an e-invoice or e-credit note	Within the VAT law timeline if you are VAT registered, and in any case within 14 days of the transaction date
Tell the FTA about a system failure	Within 2 Business Days
Tell your ASP about changes to your FTA-registered data	Within 5 Business Days of the FTA confirming the change

The transaction date is the earlier of the date the transaction took place and the date you were paid. A Business Day excludes weekends and federal government holidays.

When penalties can start

• Not during voluntary use. Cabinet Decision No. 106 of 2025 does not apply to anyone issuing or reporting e-invoices voluntarily. The pilot that opened on 1 July 2026 carries no regulatory impact.
• Only from your mandatory date. The Ministry's Guidelines say penalties apply only from the date you must implement.
• Our reading of the earliest dates. For the AED 50 million or more group, the first possible penalty follows a missed ASP deadline of 30 October 2026 or a missed go-live of 1 January 2027. For businesses below AED 50 million, the same logic points to 31 March 2027 and 1 July 2027. This is our inference from the decisions, not an FTA statement.

Worked examples in AED

The examples below apply the published rates to simple situations. They are illustrations, not tax advice. The FTA issues the actual assessment, and the decision does not spell out every counting rule, for example whether a missed ASP deadline and a missed go-live are counted as one continuing delay. We assume they are.

Example 1: an ASP appointed late. A Dubai trading company with revenue of AED 6 million signs with an ASP on 20 May 2027 instead of 31 March 2027. The delay runs through April (one month) and part of May (part of a month). Penalty: 2 x AED 5,000 = AED 10,000.

Example 2: a handful of late e-invoices. In September 2027 the same company sends 30 e-invoices more than 14 days after the transaction date. Penalty: 30 x AED 100 = AED 3,000.

Example 3: the monthly cap. A contractor with a backlog sends 120 e-invoices late in October 2027 and 20 late in November 2027. October: 120 x AED 100 = AED 12,000, capped at AED 5,000. November: 20 x AED 100 = AED 2,000. Total: AED 7,000.

Example 4: late credit notes as well. In one month a business sends 60 e-invoices and 10 e-credit notes late. The table lists these as separate violations, each with its own cap. E-invoices: 60 x AED 100 = AED 6,000, capped at AED 5,000. E-credit notes: 10 x AED 100 = AED 1,000. Total: AED 6,000.

Example 5: a system failure reported late. A wholesaler's invoicing system goes down. The notice to the FTA is due within 2 Business Days, but it is sent 3 days after that. Penalty: 3 x AED 1,000 = AED 3,000. The recipient has the same duty, so a buyer whose system fails is exposed too.

Example 6: a change not passed to the ASP. A company moves office and the FTA confirms the new address. It tells its ASP 4 days after the 5 Business Day limit. Penalty: 4 x AED 1,000 = AED 4,000.

The pattern is clear. A set-up delay of under two months already costs AED 10,000, and a steady trickle of late invoices adds up quickly. Most of these penalties come from process gaps, not from the technology.

Other costs beyond Cabinet Decision No. 106

• General VAT penalties. The Guidelines note that the penalties in Cabinet Decision No. 40 of 2017 may also apply to failures on tax invoicing.
• VAT law. Article 76(6) of the VAT law lets the FTA issue a penalty assessment for failing to follow the rules on electronic tax invoices and credit notes.
• Input tax. Under Article 55(1)(c) of the VAT law, to recover input tax you must keep the tax invoice in line with the e-invoicing system where it must be issued as an e-invoice. A supplier invoice that never arrived as an e-invoice could put your VAT claim at risk.

How to avoid them

• Diarise your ASP deadline now, and aim to sign well before it. Our readiness checklist sets out a timetable.
• Invoice promptly from your accounting software, so nothing sits in a draft folder past 14 days.
• Correct errors by e-credit note straight away. An invoice cannot be cancelled or edited once issued.
• Write a one-page system failure procedure naming who emails the FTA and when.
• Tie FTA changes to an ASP update. Whenever you change your address, licence or other FTA details, update your ASP in the same week.

How we help

We do not provide e-invoicing and we are not an ASP. We keep the parts that cause most penalties under control: timely invoicing inside your accounting software, clean customer and company records, and VAT returns that match what your ASP reports. See our e-invoicing support for UAE businesses.

Frequently asked questions

What is the penalty for not appointing an e-invoicing service provider on time?

Cabinet Decision No. 106 of 2025 sets AED 5,000 for each month or part of a month of delay where a business fails to implement the e-invoicing system, which includes failing to appoint an Accredited Service Provider on time.

Can I be fined for e-invoicing mistakes during the pilot or if I start voluntarily?

No. Cabinet Decision No. 106 of 2025 does not apply to a person who issues or reports e-invoices voluntarily, and the Ministry of Finance Guidelines say penalties apply only from the date a business must implement mandatorily.

Is there a cap on penalties for late e-invoices?

Yes. The penalty is AED 100 for each late e-invoice, up to AED 5,000 per calendar month. Late e-credit notes carry the same rate and the same monthly cap.

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