All You Need to Know About eInvoicing for VAT

The government of UAE is all set to digitalise its economy by 2026 with the latest eInvoicing initiative. eInvoicing or electronic invoicing is defined as electronically exchanging invoices between buyers and suppliers in an integrated format. The processing of such an invoice is completely electronic and automatic. The format has to be structured like Peppol Invoice Standard (PINT) and not unstructured in the form of PDFs or JPG files. Read ahead to get answers to your queries about eInvoicing for VAT.

Jitendra Tax Consultants are professional tax experts who keep track of the latest trends and changes in the business and taxation landscape of the UAE. By communicating all the up-to-date information with our clients, we aim to help them comply.

Do businesses not registered for VAT also have to prepare for eInvoicing?

All businesses regardless of their registration status for the VAT have to prepare for eInvoicing as it will cover all B2G (business to government) and B2B (business to business) transactions.

What preparations do businesses need to make about their invoices?

Businesses need to analyse their transactions and invoices and make sure that they are properly in compliance with the VAT regulations. The Ministry of Finance (MoF) will publish a number of approved service providers with whom the businesses will make contracts and arrangements. The service provider of a business will complete the transmission of invoices after eInvoicing integration into the system.

Can we call eInvoicing a digital exchange of data?

The electronic invoices will be exchanged between the buyers and the sellers. The invoices will be transmitted by the accredited service providers in the XML form. The service provider would additionally be responsible for reporting the invoicing data to the FTA. So, eInvoicing is more than just a digital exchange of data.

In the case of VAT grouping, will only one group member enter into an arrangement with the accredited service provider?

Every legal business in a VAT group is obliged to have an integration with an approved service provider. It is not possible for the group to collectively integrate with the service provider for the purposes of eInvoicing.

In the case of VAT grouping, can one group member act as the seller/supplier?

When an invoice needs to be issued, it must contain the TRN (tax registration number) of the tax group. However, every member of the group who conducts transactions must integrate with an approved service provider and be responsible as a supplier.

How will tax invoices be delivered to the customers?

Every business will make a contract with an approved service provider for issuing or receiving invoices. The service provider will deliver the electronic invoices to the customers using the endpoint (electronic email) of the buyer.

How will eInvoicing be possible with foreign customers?

When selling outside the UAE, it is not a requirement for the buyer to get registered with an accredited service provider in the UAE to receive invoices. If the buyer has Peppol network registration, then he/she will provide an endpoint otherwise a dummy electronic email will be used.

Is it mandatory to engage with Accredited Service Providers?

Yes, businesses can only exchange invoices with customers and report them to the FTA with the help of these service providers. No business can do these tasks on their own. The approved service provider engaged by the seller will do the exchanging and reporting tasks and deal with Peppol UAE on their behalf.

Where to find Accredited Service Providers?

The MoF will issue a list that will include all the approved and accredited service providers from which businesses will be able to choose for themselves and make contracts.

What happens when there is an error in the e-invoice?

The service provider will check the accuracy of the invoice before delivering it to the buyer. If any error is found, the invoice will be returned to the buyer for corrections.

Why Choose Jitendra Chartered Accountants?

At JCA, you will find expert services tailored to your business needs and requirements. Our approved tax agents can help VAT-registered businesses to prepare and align with the new eInvoicing system and maintain compliance with VAT laws in the meantime. Contact our experts today to prepare for the eInvoicing system beforehand.