What are the penalties for not using e-invoicing?

Article 3 – Violations and Administrative Penalties The administrative penalties listed in the table annexed to this decision shall be imposed on the violations related to the Electronic Invoicing System.

Article 4 – Publication and Entry into Force This Decision shall be published in the Official Gazette and shall come into force from the day following the date of its publication. Cabinet Decision No. 106 of 2025 – As published by the Ministry of Finance 2 Table annexed to Cabinet Decision No. 106 of 2025 on The Violations and Administrative Penalties Resulting from the Violation of the Legislation Regulating the Electronic Invoicing System No. Description of Violation Administrative Penalty Amount 1 Failure by the Issuer to implement the AED 5,000 in case of delay for each month Electronic Invoicing System including or part thereof. the failure to appoint an Accredited Service Provider within the timeline prescribed by the Minister. 2 Failure by the Issuer to issue and AED 100 for each Electronic Invoice up to transmit an Electronic Invoice to the a maximum of AED 5,000 per calendar Recipient through the Electronic month. Invoicing System within the timeline prescribed by the Minister. 3 Failure by the Issuer to issue and AED 100 for each Electronic Credit Note up transmit an Electronic Credit Note to the to a maximum of AED 5,000 per calendar Recipient through the Electronic month. Invoicing System within the timeline prescribed by the Minister. 4 Failure by the Issuer to notify the AED 1,000 for each day of delay or part Authority of a System Failure within the thereof. timeline prescribed by the Minister. 5 Failure by the Recipient to notify the AED 1,000 for each day of delay or part Authority of a System Failure within the thereof. timeline prescribed by the Minister. 6 Failure by the Issuer or the Recipient to AED 1,000 for each day of delay or part notify the appointed Accredited Service thereof. Provider of changes to the data registered with the Authority within the timeline prescribed by the Minister. Cabinet Decision No. 106 of 2025 – As published by the Ministry of Finance 3

Table No. 3 On Violations and Administrative Penalties related to the Implementation of Federal Decree-Law No. 8 of 2017 on Value Added Tax No. Description of Violation Administrative Penalty in AED 1 The failure of the Taxable Person to 5,000 display prices inclusive of Tax. 2 The failure of the Taxable Person to 2,500 notify the Authority of applying Tax based on Margin. 3 The failure to comply with the The penalty shall be the higher of 50,000 required conditions and procedures or 50% of the Tax, if applicable, chargeable related to keeping the Goods in a on the goods in relation to the violation. Designated Zone or moving them to another Designated Zone. 4 The failure of the Taxable Person to 2,500 for each detected case. issue a Tax Invoice or the alternative document when making any supply. 5 The failure of the Taxable Person to 2,500 for each detected case. issue a Tax Credit Note or the alternative document. 6 The failure of the Taxable Person to 2,500 for each detected case. comply with the conditions and procedures regarding the issuance of a Tax Invoice and a Tax Credit Note electronically. Cabinet Decision No. 49 of 2021 - Issue Date: 28 April 2021 - Unofficial Translation 7

According to the new Article 55(1)(d) of the ) من55( ) من المادة1( وفقا ً للفقرة الجديدة (د) من البند Decree-Law, the Cabinet may prescribe any other يجوز لمجلس الوزراء تحديد أية شروط،المرسوم بقانون .أخرى السترداد ضريبة المدخالت conditions for Input Tax recovery. Conditions and requirements for issuing Tax 65 شروط ومتطلبات إصدار الفاتورة الضريبية – المادة Invoices – Article 65 A new Clause 5 was added to Article 65 of the ) من المرسوم65( ) إلى المادة5( تمت إضافة البند الجديد Decree-Law, which requires Registrants subject to والذي يلزم المسجلين الخاضعين لنظام الفوترة،بقانون the Electronic Invoicing System to issue and اإللكترونية بإصدار الفواتير الضريبية وتقديمها في صيغة transmit Tax Invoices in the form of Electronic .فواتير إلكترونية وفقا ً لنظام الفوترة اإللكترونية Invoices according to the Electronic Invoicing System. Conditions and requirements for issuing the Tax شروط ومتطلبات إصدار اإلشعار الدائن الضريبي (المادة ))70( Credit Note (Article 70) A new Clause 4 was added to Article 70 of the ) من المرسوم70( ) إلى المادة4( تمت إضافة البند الجديد Decree-Law which requires Registrants subject to والذي يلزم المسجلين الخاضعين لنظام الفوترة،بقانون the Electronic Invoicing System to issue and اإللكترونية بإصدار اإلشعار الدائن الضريبي وتقديمه في transmit Tax Credit Notes in the form of Electronic .صيغة إشعار دائن إلكتروني وفقا ً لنظام الفوترة اإللكترونية Credit Notes according to the Electronic Invoicing System. ))76( تقييم الغرامات اإلدارية (المادة Administrative Penalties Assessment (Article 76) The amendments to Clauses 4 and 5 of Article 76 of ) من5() و4( توضح التعديالت التي أدخلت على البندين the Decree-Law clarify that failure to issue a Tax ) من المرسوم بقانون أن عدم إصدار فاتورة76( المادة Invoice, Tax Credit Note or any other alternative ضريبية أو إشعار دائن ضريبي أو أي مستند بديل آخر ضمن document within the legally prescribed period, will سيترتب عليه إصدار تقييم الغرامات،ً المدة المقررة قانونا result in an Administrative Penalty Assessment. .اإلدارية 5/10

Article 76 - Administrative Penalties Assessment34 Without prejudice to the provisions of the Tax Procedures Law, the Authority shall issue an Administrative Penalty Assessment to the Person and notify the Person of the same within 5 business days from the date of issuance in any of the following cases: 1. Failure by the Taxable Person to display prices inclusive of Tax according to Article 38 of this Decree-Law. 2. Failure by the Taxable Person to notify the Authority of applying Tax based on the 33 Clause amended as per Federal Decree-Law No. 16 of 2025 34 Article amended as per Federal Decree-Law No. 18 of 2022. Federal Decree-Law No. 8 of 2017 and its amendments – As published by the Ministry of Finance 36 margin according to Article 43 of this Decree-Law. 3. Failure to comply with the conditions and procedures related to keeping the Goods in a Designated Zone or moving them to another Designated Zone. 4. Failure by the Taxable Person to issue the Tax Invoice or an alternative document when making any supply, within the legally prescribed period.35 5. Failure by the Taxable Person to issue a Tax Credit Note or an alternative document, within the legally prescribed period.36 6. Failure by the Taxable Person to comply with the conditions and procedures regarding the issuance of electronic Tax Invoices and electronic Tax Credit Notes.