On 19 October 2026, the UAE Ministry of Finance issued Ministerial Decision No. 197 of 2026, amending Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System. The changes took effect from 1 October 2026 and introduce three substantive adjustments: a temporary exclusion for intra-Tax Group transactions, revised data-retention rules, and the removal of the System Failure notification requirement.
The most immediately significant change for groups of related entities is the 24-month temporary exclusion for business transactions between members of the same Tax Group. Running from 1 January 2027, these transactions will be treated as Excluded Transactions throughout that period. In practical terms, intra-group invoices will not need to flow through the Electronic Invoicing System during this window, giving Tax Groups additional time to align their internal billing processes with the new infrastructure.
On data retention, amended Article 11 now requires any person subject to the Electronic Invoicing System to retain all Electronic Invoices, Electronic Credit Notes, and associated data for the period prescribed under the Tax Procedures Law, and to make those records accessible to the Federal Tax Authority on request. Critically, the previous requirement that such data be stored within the UAE has been removed. The regulatory focus has shifted from the physical or geographic location of storage to the reliability and accessibility of the records themselves.
The decision also repeals Article 12 in full and removes the associated definition from Article 1. This eliminates the earlier obligation to notify the Federal Tax Authority of a System Failure within two business days of its occurrence. Businesses no longer need to maintain a separate System Failure reporting protocol under the E-Invoicing framework.
What this means for our clients
For founders operating through multiple UAE entities that form a Tax Group — a structure we often see in holding arrangements and free-zone groups — the 24-month exclusion provides meaningful breathing room. Rather than rushing to configure intercompany e-invoicing workflows before January 2027, Tax Groups can prioritise their external-facing invoicing compliance first. For businesses that use cloud-based accounting or ERP systems hosted outside the UAE, the removal of the local-storage requirement eliminates what had been a potential infrastructure cost or compliance complexity. However, the obligation to produce records to the FTA on demand remains firm, so offshore storage must be robustly documented and retrieval must be reliable.
- Confirm whether your UAE entities form a registered Tax Group — if so, intra-group transactions qualify for the 24-month exclusion from 1 January 2027.
- Review your e-invoicing implementation roadmap: prioritise external (non-Tax Group) transactions, which remain subject to the system's standard requirements.
- If your invoice or credit note data is stored outside the UAE, document the storage arrangement and verify that records can be retrieved and presented to the FTA promptly on request.
- Remove any internal System Failure notification workflows built around the now-repealed Article 12 and the two-business-day reporting window.
- Check that your accredited e-invoicing service provider is aware of Decision No. 197 of 2026 and has updated its compliance guidance accordingly.
- Consult your tax adviser to confirm which transactions in your specific structure qualify as Excluded Transactions under the amended rules.
The full text of Ministerial Decision No. 197 of 2026 is referenced in the Economy Middle East report linked above. If you would like to assess how these amendments apply to your UAE corporate structure, our team at Sirius Consulting is available for a dedicated consultation.