UAE drops local storage rule and pauses e-invoicing inside tax groups

UAE drops local storage rule and pauses e-invoicing inside tax groups

19 October 2026: The UAE Ministry of Finance has changed three parts of its electronic invoicing rules: invoices between members of the same VAT tax group are excluded for 24 months from 1 January 2027, e-invoice data no longer has to be stored inside the UAE, and the duty to report a system failure to the Federal Tax Authority within two business days is gone. Ministerial Decision No. 197 of 2026 amends Decision No. 243 of 2025, and the Ministry says it took effect on 1 October 2026.

Not yet independently verified. The amendments are summarised from the Ministry of Finance announcements; we have not read the text of either decision, and the Ministry does not state when they were published in the Official Gazette. We will update this when it can be confirmed, and remove this note.

Intra-group invoices wait until 2029

The exclusion covers "Business Transactions between Persons that are members of the same Tax Group", which will be treated as Excluded Transactions for the full 24 months starting 1 January 2027. Groups that run shared-service or recharge billing between their own entities therefore do not have to route those invoices through an accredited provider until the start of 2029, while their invoices to outside customers still go through the system on the normal timetable.

That matters most for the large groups the first wave targets. Khaleej Times describes the rollout as businesses with annual revenue above AED 50 million first, smaller businesses from January 2027 and all segments by 2028; the Ministry's announcement does not repeat that schedule. Our earlier item on the 30 October deadline to appoint an accredited provider sets out the first wave in detail.

Retention replaces location

Article 11 now requires anyone in the system to keep every e-invoice, e-credit note and associated record for the period set by the Tax Procedures Law and to produce them for the Federal Tax Authority on request. The earlier requirement that the data sit inside the UAE has been removed. In the Ministry's words, the change shifts "the focus from the location of storage to the retention and accessibility of records".

For finance teams that had held back from a cloud ERP or archive hosted in another country because of the residency clause, that obstacle is gone. The retention period and the obligation to hand records over quickly are unchanged, so a contract with an overseas host still needs an export route the team can use without the provider's help.

The decision also repeals Article 12 and deletes the definition of "System Failure" from Article 1. There is no longer a set notice the taxpayer must file within two business days when its own invoicing system goes down.

Providers with old pre-approvals have until the end of October

A second decision changes the market on the supplier side. Ministerial Decision No. 168 of 2026, announced on 9 October and also in force from 1 October, replaces the pre-approval route for e-invoicing service providers with direct accreditation: a provider must pass the full assessment and testing before it is accredited. Providers that held a preliminary approval under Decision No. 64 of 2025 have up to 30 days from 1 October 2026 to complete the new requirements, or the approval is terminated.

The Ministry keeps the option, introduced earlier this year, for a provider to build on a third-party Peppol service provider product or to outsource development and operation, while remaining responsible for compliance. The new framework also adds rules for renewal, ongoing evaluation, termination and objection.

Businesses choosing a provider for the 30 October appointment should ask whether it is fully accredited under Decision 168 rather than relying on a pre-approval letter, since any provider that misses the transition window loses its status. Our accounting software category lists nine products and our ERP category two; neither yet records UAE accreditation.

Sources

• UAE Ministry of Finance: Ministry of Finance amends electronic invoicing regulations to ease the burden on businesses, 19 October 2026
• UAE Ministry of Finance: decision on accreditation of eInvoicing service providers under updated regulatory framework, 9 October 2026
• Khaleej Times: UAE amends e-invoicing regulations to reduce operational burden on businesses, 19 October 2026