The UAE Ministry of Finance has issued Cabinet Decision No. 106 of 2025, establishing administrative fines for non-compliance with the country's Electronic Invoicing (e-invoicing) system. This is not aspirational guidance — the penalties are grounded in Federal Decree-Law No. 28 of 2022 on Tax Procedures and cross-reference Cabinet Decision No. 40 of 2017 on administrative penalties for tax law violations.
The penalties apply from the date each business becomes mandatory under the phased rollout, and they compound. Every month of delayed setup, every non-compliant invoice, every unreported outage accumulates its own separate penalty.
The Six Violations and Their Penalties
Violation 1: Failure to Implement the System or Appoint an ASP
Who it applies to: Issuer (the business issuing invoices)
Penalty: AED 5,000 for each month of delay, or part thereof
What this means: If your business fails to implement the e-invoicing system or fails to appoint an Accredited Service Provider (ASP) within the prescribed deadline, you will be fined AED 5,000 per month. This applies even if you are only partially compliant — the penalty is for the entire system not being operational.
Annual cost if ignored: AED 60,000
Violation 2: Failure to Issue and Transmit Electronic Invoices
Who it applies to: Issuer
Penalty: AED 100 per electronic invoice, capped at AED 5,000 per calendar month
What this means: Each invoice not issued in the required PINT-AE format attracts a AED 100 penalty. However, there is a monthly cap of AED 5,000 for this specific violation type. If you issue 100 non-compliant invoices in a month, the penalty is AED 5,000, not AED 10,000.
Annual cost if ignored: AED 60,000 (plus Violation 1)
Violation 3: Failure to Issue and Transmit Electronic Credit Notes
Who it applies to: Issuer
Penalty: AED 100 per electronic credit note, capped at AED 5,000 per calendar month
What this means: Credit notes are treated the same as invoices. Each credit note not issued in the required format costs AED 100, with the same AED 5,000 monthly cap.
Annual cost if ignored: AED 60,000 (plus Violations 1 and 2)
Violation 4: Failure to Notify the FTA of System Failure
Who it applies to: Issuer or Recipient
Penalty: AED 1,000 for each day of delay, or part thereof
What this means: If a system failure prevents you from complying with e-invoicing obligations, you must notify the FTA within 2 business days (excluding weekends and UAE public holidays). The penalty begins accruing after the second business day. Even partial delays count as full days for penalty purposes.
Daily cost if ignored: AED 1,000 per day
Violation 5: Failure to Notify the FTA of System Failure (Recipient)
Who it applies to: Recipient (the business receiving invoices)
Penalty: AED 1,000 for each day of delay, or part thereof
What this means: Recipients have the same obligation as issuers to notify the FTA of system failures that prevent them from receiving electronic invoices. The same 2-business-day deadline and AED 1,000 daily penalty apply.
Daily cost if ignored: AED 1,000 per day
Violation 6: Failure to Notify the ASP of Data Changes
Who it applies to: Issuer or Recipient
Penalty: AED 1,000 for each day of delay, or part thereof
What this means: When your FTA-registered data changes (company name, TRN, address, etc.), you must notify your appointed ASP within the prescribed timeline. Failure to do so incurs a AED 1,000 daily penalty.
Daily cost if ignored: AED 1,000 per day
How Penalties Accumulate
The most critical aspect of Cabinet Decision 106/2025 is that penalties are independent and cumulative. They do not replace each other — they stack.
Example scenario: A large business (≥AED 50M revenue) fails to implement e-invoicing by January 1, 2027, and continues issuing paper invoices throughout 2027:
- January 2027: AED 5,000 (system not implemented) + AED 5,000 (non-compliant invoices) = AED 10,000
- February 2027: AED 5,000 (system not implemented) + AED 5,000 (non-compliant invoices) = AED 10,000
- March 2027: AED 5,000 (system not implemented) + AED 5,000 (non-compliant invoices) = AED 10,000
Total for Q1 2027: AED 30,000
If a system failure occurs and is not reported within 2 business days, an additional AED 1,000 per day penalty applies on top of the monthly penalties.
When Do Penalties Start?
Penalties apply only when e-invoicing becomes mandatory for your business:
- January 1, 2027: Large businesses with annual revenue of AED 50 million or more
- July 1, 2027: Smaller businesses with annual revenue below AED 50 million
- October 1, 2027: Government entities
No penalties apply during the voluntary or test phases (July 1 - December 31, 2026). This is a critical window for businesses to test their systems, train their teams, and identify operational gaps without financial risk.
Beyond Financial Penalties
The cost of non-compliance extends beyond administrative fines:
- Input VAT denial: Non-compliant supplier invoices may jeopardize your ability to recover input VAT
- Invoice rejection: Buyers may reject non-compliant invoices, causing payment delays
- Audit risk: Non-compliance increases the likelihood of FTA audits
- Reputational damage: Persistent non-compliance may affect your business relationships
What Businesses Should Do Now
1. Know Your Deadline
Identify which phase your business falls into based on annual revenue. Mark your ASP appointment deadline and go-live date in your calendar.
2. Appoint an ASP Early
Don't wait until the deadline. ASP onboarding takes 4-12 weeks depending on your ERP system. Appointing early gives you buffer time for testing and training.
3. Conduct an ERP Gap Analysis
Assess whether your current accounting software can generate PINT-AE compliant invoices. If not, plan for an upgrade or integration solution.
4. Build System Failure Notification Workflows
Design a clear process for identifying system failures and notifying both the FTA and your ASP within the 2-business-day window.
5. Use the Voluntary Phase
Participate in the voluntary pilot phase (July 1 - December 31, 2026) to test your systems without penalty risk. This is your opportunity to identify and fix issues before mandatory implementation.
The Bottom Line
Cabinet Decision No. 106 of 2025 makes the cost of non-compliance specific, quantifiable, and cumulative. There is no ambiguity in the penalty table:
- Late setup costs AED 5,000 per month
- Non-compliant invoices cost AED 100 each (capped at AED 5,000/month)
- Unreported outages or data changes cost AED 1,000 per day
These penalties apply independently and accumulate simultaneously across multiple violation categories. The maximum annual cost for complete non-compliance is AED 60,000 — plus daily penalties for system failures and data change delays.
The voluntary phase is your penalty-free testing window. Use it wisely.
Start free with 50 invoices — test your e-invoicing setup during the voluntary pilot phase, no card required.
