UAE Issues Cabinet Decision No. 106 of 2025 on Penalties for Non-Compliance with the Electronic Invoicing System
The UAE Cabinet has issued Cabinet Decision No. 106 of 2025, introducing a dedicated framework of violations and administrative penalties for non-compliance with the legislation governing the UAE Electronic Invoicing System (E-Invoicing).
This Decision represents an important step in the national rollout of mandatory e-invoicing, reinforcing the obligations of taxpayers and outlining clear consequences for non-adherence.
Scope of the Decision
The Decision applies to any person required to issue, transmit, share, exchange, or report:
- Electronic Invoices (E-Invoices); and
- Electronic Credit Notes (E-Credit Notes)
in accordance with the UAE E-Invoicing System.
It does not apply to businesses participating voluntarily before their mandated phase.
Key Definitions
- Electronic Invoice: A structured, machine-readable electronic document issued, transmitted, and received through the E-Invoicing System.
- Electronic Credit Note: A structured electronic document used for adjustments and processed through the E-Invoicing System.
- Issuer: A person required to issue, transmit, share, and exchange e-invoices and e-credit notes.
- Recipient: A person required to receive e-invoices and e-credit notes.
- System Failure: A technical malfunction or unavailability of the E-Invoicing System prevents compliance.
Administrative Penalties
The penalties listed below apply to violations related to the E-Invoicing System. These amounts are taken directly from the table annexed to the Cabinet Decision.
Penalties Table – Cabinet Decision No. 106 of 2025
| No. | Description of Violation | Administrative Penalty |
| 1 | Failure by the Issuer to implement the E-Invoicing System, including failure to appoint an Accredited Service Provider within the prescribed timeline | AED 5,000 for each month or part thereof |
| 2 | Failure by the Issuer to issue and transmit an E-Invoice to the Recipient within the prescribed timeline | AED 100 per invoice, capped at AED 5,000 per calendar month |
| 3 | Failure by the Issuer to issue and transmit an E-Credit Note to the Recipient within the prescribed timeline | AED 100 per credit note, capped at AED 5,000 per calendar month |
| 4 | Failure by the Issuer to notify the Authority of a System Failure within the prescribed timeline | AED 1,000 for each day of delay or part thereof |
| 5 | Failure by the Recipient to notify the Authority of a System Failure within the prescribed timeline | AED 1,000 for each day of delay or part thereof |
| 6 | Failure by the Issuer or Recipient to notify their Accredited Service Provider of changes to data registered with the Authority | AED 1,000 for each day of delay or part thereof |
Effective Date
The Decision becomes effective the day following its publication in the UAE Official Gazette.
What Businesses Should Do Now
To comply with the new requirements, businesses should:
- Confirm their phase under the E-Invoicing mandate.
- Ensure ERP systems can generate and transmit structured e-invoices.
- Appoint an Accredited Service Provider (ASP) within the required timeline.
- Implement internal controls to prevent delays in issuing e-invoices and reporting system failures.
- Review and update contact and registration data with their ASP and the FTA.
How XB4 Can Support
XB4 CPAs Advisors provides end-to-end E-Invoicing assistance, including:
- Readiness assessments
- ASP evaluation and selection
- ERP and integration support
- Compliance reviews and staff training
For advisory support or implementation assistance, contact tax@xb4.com.
