What changed
The UAE Ministry of Finance issued Ministerial Decision No. 197 of 2026, amending the electronic invoicing framework. The decision became effective on October 1, 2026 and introduces several operational changes for persons subject to the UAE Electronic Invoicing System.
The most commercially significant change is a temporary exclusion for transactions between persons that are members of the same UAE Tax Group. For 24 months beginning January 1, 2027, these transactions will be treated as excluded transactions for electronic-invoicing purposes. This does not necessarily eliminate the need to record the underlying transaction for accounting, VAT, corporate-tax, transfer-pricing, or audit purposes; it changes the e-invoicing treatment.
Record storage is now location-neutral
The amendment also changes the storage rule for electronic invoices and electronic credit notes. Businesses must retain the documents and associated data for the period required under the Tax Procedures Law and must be able to provide them to the Federal Tax Authority when requested. However, the previous requirement that the data be stored physically inside the UAE has been removed.
This is important for groups using regional cloud infrastructure. A UAE company may now be able to use an overseas data centre, provided its records remain complete, accessible, secure, and capable of being produced to the FTA within the required timeframe.
System-failure reporting requirement removed
The amendments repeal the specific “System Failure” provisions, including the former requirement to notify the FTA within two Business Days of a system failure. Businesses should nevertheless retain incident logs and maintain business-continuity procedures because inability to issue, receive, preserve, or produce compliant records can still create wider tax-control risks.
Practical action list
- Map all intercompany transactions involving members of the same Tax Group.
- Configure ERP rules for the temporary exclusion starting January 1, 2027.
- Confirm that offshore hosting arrangements support rapid retrieval and audit trails.
- Update vendor contracts to address data retention, access, security, and exportability.
- Keep a documented incident-response process even though the dedicated two-day notification rule was removed.
- Separate e-invoicing treatment from VAT accounting and corporate-tax documentation.
Example
If a UAE parent company supplies administrative services to a UAE subsidiary in the same Tax Group during 2027, the transaction may fall within the temporary excluded-transaction treatment. The group should still retain the invoice, agreement, pricing support, accounting entry, and evidence of Tax Group membership. The exclusion should not be interpreted as permission to discard the transaction record.