E-Invoicing in the UAE’s DCTCE Framework:

Implementation & Impact

E-Billing System scheduled for 2026

The electronic invoicing project in the United Arab Emirates is called the "E-Billing System".
The government is developing legislation that will regulate electronic transactions, electronic
accounting, and storage both in the B2B and B2G domains. In the future, it will also apply to
B2C transactions.
The UAE Ministry of Finance (MoF) has outlined the key pillars of the future e-invoicing
regulatory framework in its recently published Consultation Document:
 Adoption of Peppol to streamline cross-border transactions and reduce friction.
 Implementation of the Five-Corner Model, with the tax authority acting as a Peppol
Access Point to enhance the exchange of invoices.
 AE PINT Data Dictionary, designed to standardize data requirements for invoices.

How electronic invoicing works in the United Arab

Emirates?
The UAE e-invoicing model consists of a decentralized Continuous Transaction
Control or CTC model based on Peppol. This model is also referred to as the Peppol
5-corner model.

1. The seller sends the invoice data to your certified service provider.
2. The service provider transforms the document to the standard electronic
invoice XML format in UAE.
3. The seller's supplier sends the e-invoice to the buyer's service provider. And
the buyer's service provider forwards it to the buyer.
4. At the same time, the seller's service provider communicates the tax data of
the e-invoice to the central government platform.
5. The centralized government platform sends a notification of successful
receipt.

Source: B2B e-Invoicing in the United Arab Emirates (UAE): Peppol DCTCE scheduled
for 2026
E-Invoicing in UAE timeline
Initially, the presumed date of implementation was July 2025 but due to technical
issues, it has been delayed until July 2026.

During the 2024 Dubai E-invoicing Exchange Summit, the UAE Ministry of Finance
revealed further details on the implementation of the timeline and model.

The proposed timeline for the e-invoicing implementation is as follows:

Timeline Description
Quarter 4, 2024 Accreditation process for UAE Service Providers begins.
Quarter 2, 2025 Legislative updates related to e-Invoicing introduced.
Quarter 2, 2026 Phase 1 of e-Invoicing reporting goes live.

Source: Review E-INVOICING EXCHANGE SUMMIT In Dubai 2024?

Phased Implementation:

Source: UAE Ministry of Finance eInvoicing Programme Consultation Paper

"Phased Implementation" means that the implementation of e-invoicing will
be rolled out in stages over time, with each stage applying to businesses of
different turnover levels.
Example:
India’s Phased Implementation:
 Phase 1: Initially, e-invoicing was mandatory only for businesses with
a larger turnover (₹500 crore+).
 Phase 2: Later, the requirement was extended to smaller businesses
with ₹100 crore+ turnover.
 Phase 3: Then, it was extended further to businesses with ₹50 crore+
turnover.
 Phase 4: The final phase was implemented for businesses with ₹5
crore+ turnover.

Saudia Arab’s E-invoicing System

Phases of Implementation e-Invoicing in Saudi Arabia:

PHASE 1 (as of December 4th, 2021)

Phase 1, known as the Generation phase, will require taxpayers to generate and
store tax invoices and notes through electronic solutions compliant with Phase 1
requirements.
Phase 1 is enforceable as of December 4th, 2021, for all taxpayers (excluding non-
resident taxpayers), and any other parties issuing tax invoices on behalf of suppliers
subject to VAT.
PHASE 2 (enforceable starting January 1st, 2023 in waves)
Phase 2, known as the Integration phase and rolled-out in waves by targeted
taxpayer group, will involve the introduction of Phase 2 technical and business
requirements for electronic invoices and electronic solutions, and the integration of
these electronic solutions with ZATCA’s systems.
ZATCA will notify taxpayers of their Phase 2 wave at least six months in advance,
and is rolled-out in waves by taxpayer group, as shown Below in the table. These
are few of the waves announced till date.

Saudia Arab’s Integration process with ZATCA in Phase 2:

1. Ensure Compliance – The business must use an e-invoicing solution that
meets ZATCA’s technical and security standards. Businesses need to have
an ERP (Enterprise Resource Planning) system that can integrate with the
ZATCA platform. The system should be able to generate invoices in the
correct format, transmit data to ZATCA’s platform, and handle responses
from ZATCA.
2. Onboard EGS (Electronic Generation System) Devices – The
business must register and link their invoicing system (ERP/POS) with
ZATCA.
3. Submit Invoices to ZATCA –
 For B2B transactions: Invoices must be cleared by ZATCA before
being shared with the buyer.
 For B2C transactions: Invoices must be reported to ZATCA within a
set timeframe.
Source: Detailed Guidelines for E-Invoicing
Step by Step Process of E-invoicing in Saudia Arab:
1. Invoice Generation
 Generate a sale invoice using your system (ERP, accounting software, etc.).
 Ensure it meets ZATCA’s format and includes necessary details (e.g., VAT,
item details).
2. Invoice Submission to ZATCA
 Submit the generated invoice to ZATCA’s system using the integrated API.
 ZATCA will validate the invoice and provide a response.
3. ZATCA Validation
 ZATCA checks the invoice for compliance and authenticity.
 If valid, ZATCA generates a Clearance/Authorization ID (unique reference
number for the invoice).
4. Invoice Receipt Confirmation
 After validation, the invoice is approved and authorized by ZATCA.
 The Clearance ID is returned to your system.

5. Incorporation of Clearance ID
  Automatically update your system with the Clearance ID.
 Attach it to the invoice, and it becomes the final, authorized document.
6. Invoice Transmission to Buyer
 Invoice with Clearance ID is sent to the buyer’s system (via email or ERP
integration).
 The buyer can then access the invoice in their system for VAT reporting.

Key Differences: Saudi Arabia vs. UAE (Future DCTCE

Model)
Feature Saudi Arabia (ZATCA Phase 2 UAE (Future DCTCE Model –
- Centralized System) Decentralized)
Invoice Seller submits invoices to ZATCA Seller submits invoices to a
Submission for clearance/reporting distributed network
Tax ZATCA validates and approves The UAE tax system will
Authority’s invoices but does not send them validate and also distribute
Role to buyers invoices directly to buyers
Invoice Buyer’s ERP system will
Seller must manually send the
Sharing automatically receive the
cleared invoice to the buyer
invoice after validation
Technology Decentralized network,
Centralized system, where
Used enabling secure and direct
ZATCA acts as the authority
invoice exchange
Buyer’s ERP Buyers must manually collect Buyer’s ERP automatically
Integration invoices or integrate their ERP receives invoices after
with sellers validation
Automation Partial automation (requires Full automation with real-time
Level seller involvement) buyer invoice receipt

API (Application Programming Interface)

API (Application Programming Interface)-based automation is a method of
connecting software systems (like your ERP system or billing software) to the
ZATCA system or any other Government Authority system for automatic
invoice generation and reporting.
How It Works for ZATCA?
 Integration: ZATCA’s API allows businesses to automatically connect
their internal systems (such as ERP or billing software) directly to the
ZATCA portal, eliminating the need for manual data entry and ensuring
real-time transmission of invoicing data.
  Invoice Uploading: Once a business generates an invoice in its ERP
system, the ZATCA API automatically uploads the invoice to the ZATCA
system. It also generates an Invoice Reference Number (IRN) and
creates the required QR code for each invoice, ensuring compliance
without any manual involvement.
 Data Sync: The ZATCA API can automatically synchronize e-invoice
data with the relevant government systems, ensuring the data is
accurate and available for VAT and other tax filings, helping businesses
stay compliant.
Why Businesses Use API-Based Automation?
 Bulk Invoice Handling: If a business generates many invoices every
day, manual uploading is time-consuming and error-prone. The API
automates the entire process in real-time.
 Error-Free Compliance: Automation reduces human errors and
ensures that every invoice is correctly reported to IRP.
 Faster Processing: APIs can handle real-time data exchange, making
the process quicker and smoother.
 Seamless Integration: APIs can integrate directly with ERP software
(e.g., Tally, SAP), so businesses don’t need to manually enter data in
multiple systems.
API-based automation is a global practice used in many countries for various
tax and invoicing systems, especially where businesses need to comply with
electronic invoicing (e-invoicing) or real-time reporting to tax authorities.