How to Generate e-Invoices in the UAE: Step-by-Step Guide

If anything is redefining the way UAE businesses handle compliance and efficiency in 2025, that is digital accountability. The gaining momentum of the UAE’s e-invoicing system under the Federal Tax Authority (FTA) ensures that invoices are no longer just paper slips or PDFs; rather,  they’re structured digital documents that can travel through secure and government-approved channels.

Honestly, the entire e-invoicing scenario is a part of a larger move, leading toward smarter, faster, and more transparent business operations. Here, automation takes over repetitive financial tasks, and human teams focus on strategy, growth, and decision-making.

What Exactly Is e-Invoicing

In simple terms, E-invoicing or electronic invoicing is a process of letting you create, send, receive, and store invoices in a digital and standardized format. Not to mention, it must be approved by the Federal Tax Authority (FTA). So, being different from traditional PDFs or paper invoices, e-invoices use structured data formats (usually XML or JSON) that can be easily validated, tracked, and integrated directly with accounting systems without any chaos.

For UAE businesses, this means:

• Automatic compliance with FTA invoicing rules.

• Faster validation, and mainly with reduced manual errors.

• An instant visibility into invoices that are already issued and received.

• Completely simplified VAT reporting and all-time audit-readiness.

Well, this transformation makes sure every transaction becomes traceable, compliant, and ready for submission in less time.

Key Dates to Remember for UAE E-Invoicing

Mark your calendar. The e-invoicing rollout is phased, so being aware now means you won’t be caught flat-footed:

• The legal groundwork: Federal Decree‑Law No. 16 of 2024 amended the VAT law to recognise electronic invoices.

• Pilot phase begins 1 July 2026 for B2B and B2G transactions.

• Mandatory phase for larger businesses (revenue ≥ AED 50 million): They must appoint an Accredited Service Provider (ASP) by 31 July 2026 and implement e-invoicing from 1 January 2027.

• Other VAT-registered businesses (revenue < AED 50 million): Businesses with less revenue should appoint ASP by 31 March 2027 and must go live from 1 July 2027.

• Government entities (B2G side): The timeline of ASP appointment for Government entities is by 31 March 2027, and implementation from 1 October 2027.

How to Generate e-Invoices in the UAE: Step-by-Step

Most of you may think generating an e-invoice in compliance with UAE regulations is a complex process, but with the right e-invoicing system, the process can be straightforward.

First of all, you must be with the Federal Tax Authority (FTA).

1. Select an e-invoicing system that is FTA-accredited

First, you’ll need software that’s able to match the demand of the UAE authorities.

Go for the following features:

• Your software needs to support structured formats like XML or UBL that are machine-readable.

• Integration with Accredited Service Providers (ASPs) is a must. Your e-invoice system will need to connect with one of these to validate, convert, and transmit invoices.

• It’s crucial you choose a system with a built-in ability to check your data fields for completeness and correctness as per the UAE data dictionary.

• Your system should allow you to store invoices in accordance with UAE retention rules.

That’s why you can choose a solution like Tally Prime, which already supports UAE VAT and FTA compliance.

2. Generate the e-Invoice

Now it’s time to issue the invoice, but in the right format, and with the right details:

Supplier details: Your invoice must include the name of your business, your Tax Registration Number, address, and contact details.

Buyer details: Make sure it contains the buyer’s legal name, their TRN if VAT-registered, and their address, along with contact information.

Invoice identification: It’s required that e-invoices should have a Unique invoice number, issue date, and the invoice type.

Goods/services’ Description: You must provide the invoice with a clear description of the service or goods that were sold. Also, do not forget to mention their quantity and unit price.

VAT breakdown: You should show the taxable amount, VAT rate, VAT amount, and then the total VAT for each line of goods or services.

QR code: In many frameworks, having the QR code is mandatory. It’s specifically helpful for authenticity and quick verification.

3. Validate and Transmit the Invoice

• Submission: You need to generate the e-invoice with all the required fields that are mentioned above, using your software.

• Validation: In this process, the ASP checks that the invoice meets the data dictionary requirements. If there is any type of error, it’s your responsibility to provide the invoice again in the correct form.

• Transmission: The e-invoice is transmitted to the buyer’s ASP once validated.

• Delivery: The buyer receives the invoice in their accounting or ERP system via their ASP.

• FTA reporting: The tax authority receives invoice data and monitors compliance instantly.

4. Store and Manage e-Invoices Securely

As per the UAE law, you must keep the e-invoices secured for at least five years. So, use cloud-based storage to ensure they remain accessible for audits.

Suppliers: Suppliers need to retain the issued e-invoices and credit/debit notes in a compliant, secure format for the period required by the tax law.

Buyers: You must also keep the received e-invoices and supporting records so you can support your VAT input-tax claims, audit trail, and reconciliation.

5. Link e-invoice data to VAT returns

Automated VAT returns: Because your e-invoices are now completely machine-readable and transmitted to the tax authority, your accounting system can also validate VAT returns directly from the invoice data instead of unnecessary manual entry.

Integration: You can connect both your e-invoicing solution and accounting software with each other using the right technology. Overall, it’ll lead to less manual reconciliation and fewer errors.

Monitoring: Now the UAE tax authority has visibility of your invoice data. That means quicker audits and heightened expectations of accuracy on your part.

So, if you’ve been managing invoices the old way, like manual entries or PDFs, then this shift might be difficult for you. But trust us, it doesn’t need to be. Starting right now will keep you ahead of time.

At Penieltech, we are doing the same; keeping you ahead of the competition. We are a reliable technology provider for UAE businesses. Our overall expertise in Tally software, Tally Prime customization, and cloud hosting helps companies adapt to compliance changes without any kind of disruption.