UAE E-Invoicing Fines Explained Under Cabinet Resolution 106 of 2025
The Ministry of Finance (MoF) of the United Arab Emirates has announced the issuance of Cabinet Resolution No. (106) of 2025, which establishes a structured system of administrative fines for businesses that fail to comply with the national Electronic Invoicing System. This resolution supports the UAE’s ongoing digital transformation and aims to enhance transparency, accuracy, and efficiency across the tax system.
The mandate applies to all entities required to implement electronic invoicing under Ministerial Decision No. 243 of 2025. By formalising penalties, the UAE reinforces its commitment to modernising financial processes and ensuring all taxable entities follow consistent invoicing standards
Overview of the New E-Invoicing Penalty Framework
The Cabinet Resolution outlines several fines businesses may face if they do not comply with system requirements. These penalties are designed to ensure the timely issuance, transmission, and reporting of electronic invoices and credit notes, as well as prompt communication in case of system malfunctions or data changes.
Administrative Fines Table
| Amount (AED) |
Fine Description |
| 5,000 per month |
For failing to implement the Electronic Invoicing System or failing to appoint an approved service provider |
| 100 per electronic invoice |
Per electronic invoice not issued or sent within the specified timeframe, with the total administrative fine not exceeding AED 5,000 per month |
| 100 per electronic credit note |
Per electronic credit note not issued or sent within the specified timeframe, with the total administrative fine not exceeding AED 5,000 per month |
| 1,000 per day |
For each day of delay, or part thereof, for failing to notify the Federal Tax Authority of any malfunction in the Electronic Invoicing System within the specified timeframe |
| 1,000 per day |
For each day of delay, or part thereof, for failing to notify the appointed approved service provider of any modification to the data registered with the Authority within the specified timeframe |
Expanding the Scope of Digital Tax Compliance
Under this resolution, all entities that are legally required to adopt the Electronic Invoicing System, based on Ministerial Decision No. (243) of 2025—must fully implement the system and follow all procedures connected with issuing and transmitting electronic invoices. Those who have chosen to use the system voluntarily will not face any fines until they are formally brought under the mandatory phase.
By clearly defining responsibility and accountability, the government aims to ensure a smooth and consistent rollout of the e-invoicing system across various sectors.
Clear Penalties for Non-Compliance
To support proper implementation and encourage timely adoption, the resolution establishes a structured penalty system for violations. These administrative fines are designed to ensure that businesses maintain accurate, timely, and compliant electronic invoicing practices. The fines include:
Failure to Implement the System
A monthly penalty of AED 5,000 will apply to any entity that does not activate the Electronic Invoicing System or fails to appoint an approved service provider within the required timeframe outlined in Ministerial Decision No. (244) of 2025.
Delayed or Missing Electronic Invoices
A fine of AED 100 will be imposed for every electronic invoice that is not issued or transmitted within the specified window. To prevent excessive penalties, the total fine for this category is capped at AED 5,000 per month.
Delayed or Missing Electronic Credit Notes
Similarly, a fine of AED 100 applies for each electronic credit note not submitted or transmitted on time, with a maximum monthly limit of AED 5,000.
Failure to Report System Issues to the FTA
If a business does not inform the Federal Tax Authority about a system malfunction within the required timeframe, a penalty of AED 1,000 per day—or part of a day—will be charged.
Failure to Update the Approved Service Provider
A fine of AED 1,000 per day will also apply if businesses fail to notify their approved service provider of any changes to the data recorded with the Authority.
Advancing Toward a Fully Digital Economy
The introduction of these fines represents more than just regulatory enforcement; it signals a significant milestone in the UAE’s broader journey toward an integrated digital economy. By establishing clear expectations and consequences, the government is helping ensure that businesses adapt smoothly to modern financial reporting standards.
This resolution reinforces the UAE’s position as a global leader in digital transformation, transparency, and efficient tax administration—paving the way for improved business processes and enhanced national competitiveness.
Steps Businesses Should Take Now
- Conduct an internal assessment to determine readiness for e-invoicing.
- Appoint an approved e-invoicing service provider if required.
- Train finance and accounting teams on all technical and procedural requirements.
- Update workflows to ensure timely issuance and transmission per regulations.
- Establish monitoring and reporting procedures for system downtime or data modifications.
Conclusion
The issuance of Cabinet Resolution No. 106 of 2025 is a significant milestone in the UAE’s journey toward digitising its tax and financial systems. By clearly defining penalties, the Ministry of Finance aims to encourage full compliance and support a smoother nationwide transition to electronic invoicing. Businesses operating in the UAE should begin preparing immediately to avoid penalties and ensure seamless adaptation to the new system.
Frequently Asked Questions Related to E-Invoice Fines
1. What is the e-invoice penalty under UAE Cabinet Resolution 106 of 2025?
It sets out all fines for non-compliance with the UAE e-Invoicing System, including delays in implementation, missing invoices, and reporting failures.
2. What e-invoice fine applies if a business does not issue invoices electronically on time?
A fine of AED 100 per late or missing e-invoice applies, capped at AED 5,000 per month.
3. What is the e-invoice penalty for not implementing the e-Invoicing System on time?
Businesses may face a monthly penalty of AED 5,000 until the system is properly implemented or an accredited provider is appointed.
4. Is there an e-invoice fine for not reporting system errors or data changes?
Yes. Failure to notify the FTA or the service provider may result in a penalty of AED 1,000 per day for e-invoices.
5. How can businesses avoid e-invoice penalties in the UAE?
They must implement the system on time, issue all invoices electronically, and promptly report any system issues or registration updates.
