UAE exempts intra-group transactions from e-invoicing for 24 months

Summary

• UAE Ministry of Finance grants tax groups a 24-month e-invoicing exemption on internal transactions from January 2027.
• The amendment also scraps the requirement to store e-invoice data inside the UAE.
• Companies gain breathing room on compliance costs as the e-invoicing regime phases in.

The latest

Transactions between members of the same tax group in the UAE will be temporarily exempt from e-invoicing for 24 months starting 1 January 2027, under Ministerial Decision No. 197 of 2026 issued by the Ministry of Finance. The decision amends the e-invoicing framework set out in Ministerial Decision No. 243 of 2025 and takes effect on 1 October 2026, according to the Emirates News Agency.

Details

• The exemption: Decision 197 temporarily exempts transactions carried out between persons within a single tax group from the e-invoicing requirement for 24 months, beginning 1 January 2027, according to the Ministry of Finance. The exemption covers intra-group dealings only, not transactions with outside parties.
• The legal instrument: The measure takes the form of Ministerial Decision No. 197 of 2026, amending provisions of Ministerial Decision No. 243 of 2025 on the e-invoicing system. It enters into force on 1 October 2026, three months before the intra-group exemption window itself begins.
• Record-keeping rewritten: Article 11, covering retention of electronic invoices, is replaced in full. Under the new text, e-invoices, electronic credit notes and their associated data must be retained for the period specified in the Tax Procedures Law and made available to the Federal Tax Authority on request.
• Data localisation dropped: The revised Article 11 removes the condition that e-invoicing data be stored inside the UAE, freeing companies to keep invoice records on systems hosted abroad — a recurring cost and architecture question for multinationals running regional cloud infrastructure.
• Outage rules repealed: Article 12, governing system outages, is repealed outright, including the obligation to notify the Federal Tax Authority within two working days of a failure. The related definition tied to that article in Article 1 of the original decision is also deleted.
• The ministry's rationale: The Ministry of Finance said the amendments are intended to ease operational burdens on businesses and give them greater flexibility in applying the e-invoicing system, according to the Emirates News Agency. The ministry did not publish an estimate of the compliance savings involved.
• What stays: The retention obligation survives: companies remain bound by the timeframe set in the Tax Procedures Law and must produce records to the Federal Tax Authority when asked. Only the storage location and the outage-notification duty have been removed.
• Timeline markers: Two dates now govern the file. The amending decision applies from 1 October 2026, while the intra-group exemption runs 24 months from 1 January 2027. The ministry did not say what regime applies to intra-group transactions once that window closes.

Background

The UAE set out its e-invoicing framework in Ministerial Decision No. 243 of 2025, which established reporting, record-keeping and outage-notification duties for businesses. Decision 197 is the first announced amendment to that framework, narrowing its scope before the system reaches full application.

Between the lines

The three changes point in the same direction: fewer obligations at the start of the regime. Exempting intra-group transactions removes the highest-volume, lowest-revenue invoicing traffic, while dropping in-country storage and two-day outage notices removes two technical compliance hooks. Together they suggest sequencing concerns rather than a retreat from e-invoicing, since the retention duty to the Federal Tax Authority is left intact.

What's next

Watch for Federal Tax Authority implementation guidance ahead of the 1 October 2026 effective date, and for any clarification of the rules applying to intra-group transactions after the 24-month window expires at the end of 2028.

Source: Emirates News Agency (WAM), UAE Ministry of Finance