ME-ALLIANCE LEGAL UPDATE
Ministerial Decision No. (197) of 2026 Amending Certain Provisions of Ministerial Decision No. (243) of 2025 Concerning the Electronic Invoicing System
Ministerial Decision No. (197) of 2026 was issued on 28 September 2026 to amend several provisions of Ministerial Decision No. (243) of 2025 concerning the Electronic Invoicing System.
The Decision does not establish a new electronic invoicing framework but rather refines its scope, exemptions, and certain operational obligations, while introducing additional tax-related concepts and repealing provisions that are no longer aligned with the revised regulatory framework.
Amendment of Definitions and Strengthening Integration with the Tax System
Article (1) amends the definition of an “Accredited Service Provider” to mean a service provider accredited to provide electronic invoicing services in the State in accordance with the legislation governing the Electronic Invoicing System, rather than referring directly to Ministerial Decision No. (64) of 2025.
Two additional definitions, “Tax Group” and “Taxable Person”, have also been introduced, strengthening the integration of the Electronic Invoicing System with the Value Added Tax framework. Conversely, the definition of “System Failure”, previously included in the 2025 Decision, has been repealed.
Restructuring Exemptions from Electronic Invoicing
Article (4) has been replaced in its entirety to redefine the exemptions applicable under the Electronic Invoicing System.
The revised provisions maintain the exemption for transactions conducted by government entities in their sovereign capacity, provided that such activities do not compete with the private sector, together with certain transactions involving the aviation sector and financial services that are exempt from VAT or subject to zero-rating.
The 2026 amendment introduces an important additional exemption for transactions conducted between persons belonging to the same Tax Group. This exemption applies for a period of 24 months commencing on 1 January 2027.
The Decision also retains the Minister’s authority to designate additional business transactions or categories of persons exempt from the Electronic Invoicing System.
Voluntary Participation in the System
The amended Article (4) confirms that, notwithstanding the applicable exemptions, a person may voluntarily elect to issue, exchange, and report electronic invoices and electronic credit notes.
Where such an election is made, the person becomes subject to the provisions governing the Electronic Invoicing System and the related implementing decisions, except for provisions concerning violations and administrative penalties.
This establishes a voluntary compliance mechanism enabling exempt persons to participate in the system without becoming subject to the administrative penalties associated with mandatory compliance.
Amendment to the Deadline for Issuing Electronic Invoices
The Decision replaces Clause (5) of Article (6), requiring electronic invoices or electronic credit notes to be issued and transmitted through the Electronic Invoicing System within 14 business days from the date of the business transaction, subject to the time limits prescribed under the Value Added Tax legislation.
This amendment establishes a clear procedural deadline for issuing and transmitting electronic invoices, thereby strengthening operational compliance and ensuring greater consistency in implementing the system.
Restructuring Electronic Invoice Data Retention Requirements
Article (11), concerning data retention, has been replaced to require any person subject to the Electronic Invoicing System to retain electronic invoice and electronic credit note data, together with any related information, for the periods prescribed under the Tax Procedures Law.
Such records must be maintained in a manner that ensures their availability to the Federal Tax Authority upon request.
This amendment reinforces the relationship between electronic invoicing obligations, statutory record-keeping requirements, and tax regulatory oversight.
Repeal of Article (12)
The amendment expressly repeals Article (12) of Ministerial Decision No. (243) of 2025.
Consequently, the provisions previously contained in that Article cease to apply from the effective date of the new Decision.
Legal and Regulatory Implications of the Amendment
The principal effect of Ministerial Decision No. (197) of 2026 is to recalibrate the Electronic Invoicing System ahead of its practical implementation.
The amendment strengthens the integration of the system with fundamental VAT concepts, revises the applicable exemptions, introduces specific treatment for transactions conducted within the same Tax Group, standardizes the 14-business-day issuance requirement, and reinforces data retention obligations.
Furthermore, replacing the definition of an Accredited Service Provider with a broader reference to the legislation governing the Electronic Invoicing System, rather than a specific regulatory decision, provides greater legal flexibility should the accreditation framework for service providers be amended in the future.
The Decision enters into force on 1 October 2026. Accordingly, the amended provisions become the applicable legal reference, replacing the corresponding provisions of Ministerial Decision No. (243) of 2025.
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