The objective of the consultation paper is aimed at gathering feedback from UAE businesses and e-Invoicing Service Providers on the proposed elements of the UAE e-Invoicing Framework and to create a shared understanding of the requirements and streamline business adoption.

Key components of the consultation paper include:

1. e-Invoicing Data Dictionary: a standardized catalog of data elements used in e-Invoices, ensuring consistency across different document types.
2. Excluded Transactions: certain business transactions that do not require e-Invoicing exchange or reporting.

In detail

Below are the main points from the UAE e-Invoicing Programme:

UAE e-Invoicing Framework

• Scope: e-Invoicing requirements apply to all businesses operating in the UAE, regardless of their VAT registration status.
• Model: The UAE has adopted a Decentralized Continuous Transaction Control and Exchange (DCTCE) model, which leverages decentralized technologies for efficient, secure, and transparent transaction processing.
• Data standardization: The e-Invoicing Data Dictionary (PINT AE) will standardize data elements across all e-Invoices, ensuring consistency and interoperability.
• Phased rollout: The e-Invoicing programme is expected to be rolled out in phases, with a comprehensive strategy to be communicated to the business community.
• Key stakeholders:
  • Suppliers who enter invoice data into their business software and initiate the invoicing process
  • Accredited Service Providers (ASP) who validate and transmit invoice data to the buyer and report tax data to the Central Data Platform
  • The Federal Tax Authority (FTA) who is responsible for collection, processing and storing of data from ASPs
• Compliance Requirements: Businesses will need to ensure that their invoicing systems comply with the new e-Invoicing framework, including the use of mandatory fields and adherence to specific data formats.

Overview of the Data Dictionary (PINT AE)

• The Data Dictionary is a critical component of the e-Invoicing ecosystem, providing a standardized catalog of data elements used in generating, exchanging, processing, and reporting e-Invoices.
• Use cases: The document outlines (16) common use cases for generating invoices and credit notes, including:
  • Standard tax invoices
  • Reverse charge mechanism
  • Zero-rated supplies
  • Deemed supplies
  • Disclosed agent billing
  • Summary tax invoices
  • Continuous supplies
  • E-commerce supplies
  • Exports
  • Margin scheme
  • Tax credit notes
  • Commercial invoices
  • Self-billing

A detailed Appendix is provided with sample invoice formats.

• Mandatory fields: The document lists mandatory fields for standard tax invoices and commercial invoices, including invoice details, seller and buyer details, document totals, tax breakdowns, and invoice line items.

Potential new requirement to issue e-Invoices for exempt and out-of-scope supplies

We note that on page 8 of the consultation paper, there is a reference to a list of (49) mandatory fields required to be on the e-Invoice when issuing any other invoice (commercial invoice) related to exempt or out-of-scope supplies. This appears to suggest an additional requirement not specifically listed in the (16) common use cases. Furthermore, this proposed new requirement is not currently reflected in Article 65 of the UAE VAT Law (and its amendments) which specifically states that a tax invoice is only required to be issued in relation to taxable supplies and deemed supplies. Exempt supplies and out-of-scope supplies are not mentioned in this Article of the UAE VAT Law.

In addition, Article 59(3) of the UAE VAT Executive Regulation (and its amendments) further provides that a tax invoice is not required to be issued for wholly zero-rated supplies.

With the introduction of e-Invoicing, there seems to be a potential shift towards a requirement for businesses to issue e-Invoices or capture information for all types of supplies, including exempt supplies, out-of-scope supplies, and wholly zero-rated supplies. This new development will need to be closely monitored as and when the e-Invoicing requirements are finalised.

Consultation timeline and form

We note that the Consultation Paper does not state an exact release date or deadline for submission of feedback by businesses. That being said, the process for submissions are online via following this hyperlink.

Key immediate next steps for businesses

• Review the Data Dictionary: Businesses should review the Data Dictionary to understand the mandatory and optional fields required for e-Invoices.
• Assess system readiness: Businesses should assess whether their current invoicing systems can comply with the new e-Invoicing requirements.
• Provide feedback: Businesses should provide feedback on the proposed e-Invoicing framework, particularly on the following aspects:
  • Comprehensiveness: Stakeholders are asked to provide feedback on whether all required fields are included in the Data Dictionary, including core data elements, general use cases, and industry-specific data elements.
  • Clarity: Stakeholders are asked to assess whether the definitions of data elements are clear and unambiguous.
  • Practicality: Stakeholders are asked to provide feedback on the practicality of reporting specific transactions, such as the number of digits required for Harmonized System Nomenclature (HSN) ("HS Code") and service codes.
• Prepare for implementation: Businesses should start planning for the implementation of e-Invoicing, including potential upgrades to their invoicing systems and training of staff.

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To speak with us on any of the proposed changes to the UAE e-Invoicing Programme, or any tax matters or issues more generally, please contact one of the team members above.