The UAE Ministry of Finance has issued Ministerial Decision No. 197 of 2026, amending certain provisions of Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System. The amendments, effective from 1 October 2026, introduce a temporary exclusion for transactions between members of the same VAT group, extend the electronic invoicing deadline, relax data storage requirements and remove the obligation to report system failures. The Decision also introduces several technical and definitional changes.
1. Temporary exclusion for intra-VAT-group transactions
Transactions between members of the same VAT group are now excluded from the electronic invoicing requirements for a period of 24 months starting from 1 January 2027. This exclusion, introduced under Article 4(1)(f), provides temporary relief for businesses undertaking transactions between entities belonging to the same VAT group.
2. Extension of the electronic invoicing deadline
Article 6(5) has been amended to extend the deadline for issuing and transmitting electronic invoices and electronic credit notes from 14 calendar days to 14 business days from the date of the business transaction. However, the amendment remains subject to Article 6(4), which requires VAT registrants to comply with the invoicing timelines prescribed under the VAT Law.
3. Removal of the UAE data storage requirement
Article 11 has been amended to remove the explicit requirement to store electronic invoices, electronic credit notes and associated data within the UAE. Instead, businesses must retain these records for the period prescribed under the Tax Procedures Law and ensure they can be produced to the Federal Tax Authority upon request. This provides greater flexibility in data storage arrangements, subject to other applicable legal requirements.
4. Removal of system failure notification requirements
Article 12, which previously required issuers and recipients to notify the Federal Tax Authority of a system failure within two business days, has been repealed. The corresponding definition of "System Failure" has also been removed from Article 1. Consequently, the specific notification obligation under this Decision no longer applies.
5. Changes to the exclusion of persons
Article 4(2) has been amended to clarify that the Minister may exclude specific persons as well as categories of persons from the electronic invoicing requirements. Previously, the provision referred only to categories of excluded persons.
6. Amendments to definitions
Article 1 introduces definitions for "Tax Group" and "Taxable Person", aligning these terms with the UAE VAT legislation. In addition, the definition of "Accredited Service Provider" has been amended to refer generally to the legislation regulating the Electronic Invoicing System, rather than specifically to Ministerial Decision No. 64 of 2025.
Read the Ministerial Decision from here.
Do you want to learn more about the Fundamentals of UAE Corporate Tax? Order your copy from here.
