The invoice you never send costs AED 100. The outage you never report costs AED 1,000 a day.
Cabinet Decision No. 106 of 2025 is three pages long and its operative content is a table of six violations. Read it once and the design becomes obvious: the penalties for getting the invoicing wrong are capped, and the penalties for failing to tell the authority something are not. The most expensive mistake available under this decision is not a missing invoice. It is silence.
The six violations
| # | Violation | Penalty |
|---|---|---|
| 1 | Issuer fails to implement the eInvoicing system, including failing to appoint an Accredited Service Provider within the timeline set by the Minister | AED 5,000 per month or part thereof of delay |
| 2 | Issuer fails to issue and transmit an electronic invoice to the recipient within the timeline set by the Minister | AED 100 per invoice, max AED 5,000 per calendar month |
| 3 | Issuer fails to issue and transmit an electronic credit note within the timeline set by the Minister | AED 100 per credit note, max AED 5,000 per calendar month |
| 4 | Issuer fails to notify the Authority of a system failure within the timeline set by the Minister | AED 1,000 for each day of delay or part thereof |
| 5 | Recipient fails to notify the Authority of a system failure within the timeline set by the Minister | AED 1,000 for each day of delay or part thereof |
| 6 | Issuer or recipient fails to notify their Accredited Service Provider of changes to the data registered with the Authority within the timeline set by the Minister | AED 1,000 for each day of delay or part thereof |
Three of the six carry no ceiling. Violations 2 and 3 are explicitly capped at AED 5,000 in any calendar month, however many invoices are involved. Violations 4, 5 and 6 are stated as a daily amount with no monthly or absolute cap written into the table. A month of unreported downtime is therefore AED 30,000 — six times the maximum exposure from simply not having issued any electronic invoices at all in the same month.
The two clocks behind the uncapped fines
The penalties reference "the timeline prescribed by the Minister". Those timelines sit in Ministerial Decision No. 243 of 2025, and there are two of them.
- Two business days for a system failure. Article 12: every issuer and recipient must notify the Federal Tax Authority of a system failure within 2 business days of the date it occurs, by the mechanism the Authority determines. A system failure is defined broadly — any technical malfunction, disruption or unavailability of the eInvoicing system that prevents you from complying.
- Five business days for a data change. Article 5(3): the issuer and the recipient must notify their appointed ASP in writing of any change to the data registered with the Authority under Article 6(4) of the Tax Procedures Executive Regulation, within 5 business days of receiving the Authority's confirmation of the amendment. Change your trade licence details, your address or your authorised signatory, wait a fortnight to tell your provider, and violation 6 has been running the whole time.
"Business Day" is itself defined in MD 243: any day of the week except weekends and the official holidays of the federal government. Two business days over an Eid weekend is a longer wall-clock window than it sounds — and a shorter one than a business assuming "48 hours" will plan for.
The buyer is a penalised party too
Violation 5 is the line most businesses miss, because eInvoicing is usually described as something a seller does. Under MD 243 the recipient has its own duties: to appoint an Accredited Service Provider (Article 5(1)), to process incoming electronic invoices and credit notes through the system (Article 6(3)), and to report them to the Authority (Article 6(6)). Violations 5 and 6 attach directly to the recipient.
The practical consequence: an outage that stops invoices flowing can generate two separate daily penalties for the same event — AED 1,000 a day against the supplier who did not report it, and AED 1,000 a day against the customer who also did not. Neither is excused by the other having stayed quiet.
What a slow start actually costs
Violation 1 is the one that runs before you have issued a single invoice. A Phase 2 business — revenue under AED 50 million — must have an ASP appointed by 31 March 2027. The penalty is AED 5,000 for each month or part thereof of delay, so the meter starts on day one of the overrun rather than at the end of the first full month.
| Scenario (Phase 2, deadline 31 March 2027) | Exposure |
|---|---|
| ASP appointed 3 April 2027 — three days late | AED 5,000 |
| ASP appointed 1 June 2027 — two months and a day | AED 15,000 |
| Live but silent through a 30-day outage (issuer only) | AED 30,000 |
| Same outage, supplier and customer both silent | AED 30,000 each |
| Issued nothing at all for a full calendar month | AED 5,000 (capped) |
Note the shape of that table. The cheapest failure on it is the one that looks worst — issuing no electronic invoices for a month. The most expensive is administrative inattention. Whatever compliance process you build should therefore put its alarms on the notification duties, not only on invoice throughput.
These sit on top of the VAT penalties, not instead of them
Cabinet Decision No. 106 of 2025 is issued under the Tax Procedures Law and covers eInvoicing-specific breaches. The Ministry's guidelines separate them explicitly: eInvoicing penalties are one category, and the ordinary administrative penalties for tax invoicing failures under the VAT Decree-Law and the Tax Procedures Law — the schedule in Cabinet Decision No. 40 of 2017 and its amendments — remain a second, parallel category. Failing to issue a compliant tax invoice and failing to transmit it electronically are two different violations of two different instruments.
The voluntary window is penalty-free — until your date
Article 2(2) of Cabinet Decision No. 106 of 2025 states that the decision does not apply to a person who issues, transmits, shares, exchanges or reports electronic invoices and credit notes on a voluntary basis. Article 4(3) of MD 243 says the same from the other direction: opt in voluntarily and the entire eInvoicing regime applies to you mandatorily, "except the decisions related to the violations and administrative penalties".
The guidelines then put a boundary on it, and it is a date, not a status: "any administrative penalties shall only be applicable from the date that Person is required to mandatorily implement Electronic Invoicing". So the exemption is a window, not a permanent shield. Onboard early and every mistake between now and your phase date is free; the same mistake the day after your phase begins is not.
Read together, that is an argument for going early rather than a reason to wait. A Phase 2 business has until 1 July 2027 before penalties can attach to anything. Voluntary onboarding opened on 1 July 2026. That is a twelve-month rehearsal in which the system, your master data, your ASP and your counterparties can all fail in front of you at zero cost — see what a small business actually has to put in place to use it.
Frequently asked questions
What are the penalties for not complying with UAE eInvoicing?
Cabinet Decision No. 106 of 2025 sets six administrative penalties: AED 5,000 per month or part thereof for failing to implement the system or appoint an Accredited Service Provider on time; AED 100 for each electronic invoice not issued and transmitted in time, capped at AED 5,000 per calendar month; the same AED 100 and AED 5,000 cap for credit notes; and AED 1,000 for each day of delay in notifying the Federal Tax Authority of a system failure — payable by the issuer and separately by the recipient — and in notifying your Accredited Service Provider of changes to the data registered with the Authority.
Is there a cap on UAE eInvoicing fines?
Only on some of them. The penalties for failing to issue and transmit electronic invoices and credit notes are capped at AED 5,000 per calendar month. The three notification penalties — system failure by the issuer, system failure by the recipient, and unreported changes to registered data — are stated as AED 1,000 for each day of delay or part thereof, with no cap in the annexed table.
How quickly must a system failure be reported to the FTA?
Within 2 business days of the date the failure occurs, under Article 12 of Ministerial Decision No. 243 of 2025, using the mechanism and procedures the Authority determines. A business day is any day except weekends and official federal government holidays. Missing that window costs AED 1,000 for each day of delay or part thereof.
Can the buyer be fined under UAE eInvoicing rules?
Yes. The recipient has its own obligations under Ministerial Decision No. 243 of 2025 — appointing an Accredited Service Provider, processing incoming electronic invoices and credit notes through the system, and reporting them to the Authority. Violations 5 and 6 of Cabinet Decision No. 106 of 2025 apply specifically to the recipient, at AED 1,000 for each day of delay.
What happens if I appoint an ASP late?
Violation 1 applies: AED 5,000 for each month, or part of a month, of delay. Because part-months count, appointing three days after the deadline already costs AED 5,000. Phase 1 businesses had until 30 October 2026; businesses under AED 50 million in revenue have until 31 March 2027; government entities until 31 March 2027.
Are there penalties during the voluntary eInvoicing phase?
No. Article 2(2) of Cabinet Decision No. 106 of 2025 excludes persons who issue, transmit, share, exchange or report electronic invoices voluntarily, and Article 4(3) of Ministerial Decision No. 243 of 2025 confirms that a voluntary participant takes on the whole regime except the violations and penalties decisions. The Ministry's guidelines add the boundary: penalties apply from the date that person is required to implement on a mandatory basis.
Do eInvoicing penalties replace the existing VAT penalties?
No. They are additional. The Ministry's guidelines treat administrative penalties for tax invoicing failures under the VAT Decree-Law and the Tax Procedures Law — the schedule in Cabinet Decision No. 40 of 2017 and its amendments — as a separate category from the eInvoicing-specific penalties in Cabinet Decision No. 106 of 2025.
How long do I have to tell my ASP that my company details changed?
Five business days from the date you receive the Federal Tax Authority's confirmation of the amendment, under Article 5(3) of Ministerial Decision No. 243 of 2025. The notification must be in writing. Delay is penalised at AED 1,000 for each day or part thereof, and the obligation applies to issuers and recipients alike.
When did the eInvoicing penalties come into force?
Cabinet Decision No. 106 of 2025 provides that it is published in the Official Gazette and comes into force from the day following the date of its publication. In practice, exposure for any given business begins on the date that business is required to implement eInvoicing on a mandatory basis, because voluntary participants are outside the decision until then.
Sources
- The six violations and their amounts — Cabinet Decision No. 106 of 2025 on the Violations and Administrative Penalties (PDF)
- The 2-business-day and 5-business-day notification clocks, recipient obligations, definition of Business Day and System Failure — Ministerial Decision No. 243 of 2025, Arts. 1, 5, 6, 12 (PDF)
- ASP appointment deadlines by phase — Ministerial Decision No. 244 of 2025 (PDF) · Ministerial Decision No. 66 of 2026 (PDF)
- Penalties chapter and the voluntary-phase boundary — UAE Electronic Invoicing Guidelines V1.1, chapters 8.2 and 11 (PDF)
- Programme overview and document library — Ministry of Finance, eInvoicing
Verified 10 September 2026 against the Ministry of Finance's published PDFs. The penalty amounts are quoted from the table annexed to Cabinet Decision No. 106 of 2025. Where that table says "within the timeline prescribed by the Minister", the timelines cited here are the ones set in Ministerial Decisions No. 243 and No. 244 of 2025 as amended. The worked figures in this guide are arithmetic applied to those published amounts, not official examples.
Related
- eInvoicing below AED 50 million — scope, the TIN you may need, the single-ASP rule and the 100 free invoices a year.
- Choosing a provider — the two-year accreditation term, and why a lapsed renewal is your daily-penalty risk.
- The 51 fields and the 8 flags — what has to be on the invoice you are penalised for not sending.
- Self-billing and VAT groups — the 24-month intra-group grace period, the TIN each member needs, and why the buyer has to be live before it can self-bill you.
- VAT calculator — the 5%, the thresholds, and the eInvoicing timetable in short.
- Corporate tax calculator — the 9%, Small Business Relief, and the penalty waiver window.
- WPS: two penalty ladders, one due date — the other UAE compliance regime that fines by the day.