Not if both companies are members of the same VAT tax group. Ministerial Decision No. 197 of 2026, in force since 1 October 2026, takes invoices between members of the same VAT tax group out of the UAE e-invoicing system for 24 months from 1 January 2027. Invoices between group companies that are not in that VAT tax group stay in scope, even when the owners are the same.
The decision changed three other things. The e-invoicing rules no longer require e-invoice records to be stored in the UAE, the duty to notify the FTA of a system failure is repealed, and the general time limit for issuing an e-invoice is now 14 business days instead of 14 days.
The dates for appointing an Accredited Service Provider (ASP) and going live sit in Ministerial Decision No. 244 of 2025, as amended by Ministerial Resolution No. 66 of 2026. For in-scope businesses, the fines in Cabinet Decision No. 106 of 2025 apply today. Cabinet Decision No. 173 of 2026 repeals and replaces Cabinet Decision No. 106 of 2025 from the day after its publication in the Official Gazette. Decision 197 amends none of these.
Why this matters now: a Phase 1 business goes live on 1 January 2027, the same day the exclusion starts. If your ERP cannot tell an invoice to a tax group member from an invoice to a sister company outside the tax group, you will either send invoices you did not need to send or miss invoices you had to send, and missed invoices carry fines. Both are avoidable with work done before go-live, and the checklist at the end of this article sets it out.
What are the changes at a glance?
| Change | What it means | Source | Date checked |
|---|---|---|---|
| Tax group exclusion | Business transactions between members of the same VAT tax group are excluded from the system for 24 months starting 1 January 2027 | Ministerial Decision No. 243 of 2025, Article 4(1)(f), as replaced by Ministerial Decision No. 197 of 2026, Article 2 | 12 November 2026 |
| New and deleted definitions | Tax Group and Taxable Person are now defined by reference to the VAT Law; the Accredited Service Provider definition is replaced; the System Failure definition is deleted | Ministerial Decision No. 197 of 2026, Article 1 | 12 November 2026 |
| Record keeping | Keep e-invoices, e-credit notes and associated data for the period in the Tax Procedures Law and be able to produce them to the FTA on request. The requirement to store them in the UAE is removed | Ministerial Decision No. 243 of 2025, Article 11, as replaced by Ministerial Decision No. 197 of 2026, Article 2 | 12 November 2026 |
| System failure notice | The duty to notify the FTA of a system failure within 2 business days is repealed | Ministerial Decision No. 197 of 2026, Article 3, repealing Article 12 of Ministerial Decision No. 243 of 2025 | 12 November 2026 |
| Time limit to issue | E-invoices and e-credit notes within 14 business days of the transaction date (previously 14 days), subject to Article 6(4) | Ministerial Decision No. 243 of 2025, Article 6(5), as replaced by Ministerial Decision No. 197 of 2026, Article 2 | 12 November 2026 |
| Date in force | 1 October 2026 | Ministerial Decision No. 197 of 2026, Article 4 | 12 November 2026 |
| Deadlines and fines | Not amended by Decision 197 | Ministerial Decision No. 244 of 2025, as amended by Ministerial Resolution No. 66 of 2026; Cabinet Decision No. 106 of 2025 (Cabinet Decision No. 173 of 2026 once in force) | 12 November 2026 |
Facts checked on 12 November 2026 against the decision text and the Ministry of Finance news release of 19 October 2026, both listed under Sources.
What does the tax group exclusion mean for your group?
From 1 January 2027, and for 24 months, business transactions between members of the same tax group are outside the Electronic Invoicing System. The decision defines a tax group as two or more persons registered with the FTA as a single taxable person under the VAT Law.
The test is therefore VAT tax group membership, not membership of a corporate tax group. Companies in the same corporate group that are not in the same VAT tax group are not covered by this exclusion, and their invoices to each other stay in scope.
Sales from any tax group member to customers outside the group are unaffected and go through the system on your phase's timetable.
Two further points. Article 4(3) of Ministerial Decision No. 243 of 2025, as amended, allows a business to issue e-invoices voluntarily for excluded transactions; if it does, Decision 243 and all related e-invoicing decisions apply to those transactions, except the decisions on violations and administrative penalties. And the exclusion ends after 24 months, so intra-group flows should be set up so they can move into the system later without rebuilding the ERP.
Hypothetical example: a trading group has four UAE companies. Three of them, A, B and C, form one VAT tax group; D is registered for VAT on its own. From 1 January 2027, invoices from A to B are excluded. Invoices from A to D stay in scope, because D is outside the VAT tax group even though it has the same owners. Invoices from B to an outside customer are in scope as before. The finance team flags the intra-group customer accounts in each company's ERP and reviews the flags whenever the tax group membership changes.
Do e-invoice records still have to be stored in the UAE?
Not under the e-invoicing rules. The original Article 11 required any person subject to the system to store e-invoices, e-credit notes and associated data in the UAE. The new Article 11 drops that requirement. It requires you to keep those records for the period set by the Tax Procedures Law and to make sure they can be produced to the FTA on request.
For businesses that were concerned about data residency, where the data sits is now a business choice under the e-invoicing rules. Make that choice deliberately and record it: other legal and contractual obligations may still apply to your data, and the duty to produce records on request has not changed.
What happened to the system-failure notice?
Article 3 of Decision 197 repeals Article 12 of Decision 243, which required issuers and recipients to notify the FTA of a system failure within 2 business days. The definition of system failure is deleted too. Since 1 October 2026, that notice no longer applies.
The duty to issue and transmit e-invoices on time remains, and so do the fines for in-scope businesses, set out in the table below. An outage in your own systems or at your ASP is still a risk to plan for.
Did the time limit for issuing an e-invoice change?
Yes, slightly. Article 6(5) now gives the issuer 14 business days from the date of the transaction to issue and transmit an e-invoice or e-credit note through the system, where the earlier text said 14 days. The clause is subject to Article 6(4), under which an issuer registered for VAT follows the timeline in the VAT Law. Check which rule your ERP and invoice approval workflow are built around.
What did Decision 197 not change?
- The Phase 1 dates. In-scope businesses with revenue of AED 50 million or more had to appoint an ASP by 30 October 2026 and must implement the system by 1 January 2027 (Ministerial Decision No. 244 of 2025, Article 5(1)(a), as amended by Ministerial Resolution No. 66 of 2026).
- The fines for in-scope businesses, set out in the table below.
- The use of an ASP. Issuers and recipients still meet their obligations through an Accredited Service Provider.
Cabinet Decision No. 173 of 2026 repeals and replaces Cabinet Decision No. 106 of 2025 from the day after its publication in the Official Gazette. Until then, the fines in Cabinet Decision No. 106 of 2025 apply.
The main fines for in-scope businesses:
| Violation | Today: Cabinet Decision No. 106 of 2025 | Once Cabinet Decision No. 173 of 2026 is in force |
|---|---|---|
| Failing to implement the system or appoint an ASP | AED 5,000 for each month or part of a month of delay | AED 5,000 for the first instance, and AED 5,000 for each month or part of a month that the failure continues, up to AED 50,000 in any 12 consecutive months |
| E-invoice or e-credit note not issued or sent on time | AED 100 each, up to AED 5,000 per calendar month | AED 100 each not issued and transmitted, up to AED 5,000 per calendar month |
| Late notice to your ASP of changes to registered data | AED 1,000 for each day of delay or part of a day | AED 250 for each day of delay or part of a day, up to AED 5,000 per calendar month |
If your business missed the 30 October deadline, our article on what Phase 1 businesses should do now, linked below, sets out a 30-day plan.
What should finance teams do now?
- Map your VAT tax group in the ERP. List every member, flag intra-group customer and supplier accounts, and confirm that from 1 January 2027 those invoices are routed outside the e-invoicing flow, unless you decide to issue them voluntarily.
- List group companies that are outside the VAT tax group. Their transactions with each other and with tax group members stay in scope.
- Put the end of the 24 months in the compliance calendar, and build the ERP flag so it can be switched off without rework.
- Update the record-keeping policy: the retention period under the Tax Procedures Law, the format, who retrieves the records, and how quickly you can produce them to the FTA.
- Review the ASP contract terms on where data is stored, retention, access, retrieval and exit. The e-invoicing rules no longer fix the storage location, but other laws and contracts may, so record the decision and the reason.
- Remove system-failure steps from your procedures only where they referred to the FTA notice. Keep internal escalation, contact with your ASP and a catch-up plan for invoices delayed by an outage.
- Check the invoice timing rules in your ERP and approval workflow against Article 6: the VAT Law timeline for VAT-registered issuers, and 14 business days under Article 6(5).
- Leave your deadlines as they were; Decision 197 did not change them. Update your fine assumptions to Cabinet Decision No. 173 of 2026 from the day after its publication in the Official Gazette.
How can Valorin help?
Valorin is an independent advisory firm, not an ASP. We work through one window: a gap assessment against PINT AE (the UAE e-invoicing data standard) and of your master data, what to require from an ASP, onboarding, and ERP integration and testing to go-live. Your ASP exchanges and reports the e-invoices. To start, book a short call.
For a group, we help your finance team list which entities and invoice flows sit inside and outside your VAT tax group, using your FTA registration records, so the business can decide how each flow is set up in the ERP. To book a short call, message us on WhatsApp at 058-2754282 or use the contact form.
Sources
- Ministerial Decision No. 197 of 2026 amending Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System
- Ministry of Finance news, 19 October 2026: Ministry of Finance amends electronic invoicing regulations to ease the burden on businesses
- Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System
- Ministerial Decision No. 244 of 2025 on the Implementation of the Electronic Invoicing System
- Ministerial Resolution No. 66 of 2026 amending Ministerial Decision No. 244 of 2025
- Cabinet Decision No. 106 of 2025 on violations and administrative penalties for the Electronic Invoicing System
- Cabinet Decision No. 173 of 2026 on the Violations and Administrative Penalties Resulting from Violation of the Legislation Regulating the Electronic Invoicing System
- Ministry of Finance news, 30 October 2026: MoF announces updated administrative penalties related to the UAE e-invoicing system