NaqoodMoF Decision 197 of 2026 Eases UAE E-Invoicing Rules for Tax Groups, Storage and System Failures
The Ministry of Finance has issued Ministerial Decision No. 197 of 2026, amending Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System. WAM reported the decision on 19 October 2026, and the full text is on the MoF eInvoicing page. Although it was announced this week, the decision states that it came into force on 1 October 2026.
There are three headline changes. Transactions between members of the same VAT tax group are temporarily excluded from e-invoicing. The rule that e-invoice data must be stored inside the UAE is gone. And the duty to notify the FTA of a system failure within 2 Business Days has been repealed. The decision also quietly changes one deadline that the press release does not mention, covered below.
If you are new to the programme, our UAE e-invoicing guide explains the five-corner model, the phase dates and who is in scope.
What exactly changed under Ministerial Decision No. 197 of 2026?
| Rule in Decision No. 243 of 2025 | Before | After Decision No. 197 of 2026 |
|---|---|---|
| Transactions between tax group members (Article 4) | In scope like any other business transaction | Excluded Transactions for 24 months from 1 January 2027 |
| Storage of e-invoice data (Article 11) | Stored within the State for the Tax Procedures Law period | Retained for the Tax Procedures Law period and producible to the FTA on request, with no UAE location requirement |
| System Failure (Article 12) | Notify the FTA within 2 Business Days of a System Failure | Article 12 repealed and the “System Failure” definition deleted |
The tax group exclusion is added as a new item (f) in the Article 4 list of Excluded Transactions, next to the existing exclusions for sovereign government activity, international air passenger transport, airway bills and exempt or zero-rated financial services. A 24-month window starting on 1 January 2027 runs to the end of December 2028. The decision also adds formal definitions of “Tax Group” and “Taxable Person” that point back to the VAT Law, so only groups registered with the FTA as a single taxable person for VAT qualify.
What changed that the announcement did not mention?
Article 6(5) of Decision No. 243 of 2025 said an e-invoice or electronic credit note must be issued and transmitted through the system within 14 days of the date of the business transaction. Decision No. 197 of 2026 replaces that text, and the new wording says 14 Business Days. Weekends and public holidays therefore no longer eat into the window.
Article 6(4) is unchanged. Where the issuer is a VAT registrant, the e-invoice and credit note must still be issued within the timeline set by the VAT Law, and Clause 5 applies “subject to” that rule. VAT-registered businesses should keep working to their VAT invoicing timeline rather than assume the longer window applies to them.
What does the tax group exclusion mean in practice?
If your companies sit in one tax group, invoices between those group members do not have to go through the e-invoicing system during 2027 and 2028. That removes a lot of internal recharge and intercompany traffic from your first two years on the system.
The exclusion is narrow, though. It covers business transactions “carried out between Persons who are members of the same Tax Group”. It does not exclude a group member’s sales to, or purchases from, anyone outside the group, so those still follow your normal phase dates. Article 4(3) also still lets a business issue e-invoices voluntarily for excluded transactions, in which case the e-invoicing rules apply to it in full, apart from the violations and penalties decisions.
Which deadlines are unchanged?
Decision No. 197 of 2026 does not move any phase date. Businesses with revenue of AED 50 million or more must still appoint an Accredited Service Provider by 30 October 2026 and implement by 1 January 2027, under Ministerial Decision No. 244 of 2025 as amended by Decision No. 66 of 2026. Businesses below that threshold still have until 31 March 2027 to appoint an ASP and 1 July 2027 to go live. Our post on MoF Decision 168 of 2026 covers the separate accreditation rules your provider must meet.
What should SMB owners and accountants check now?
First, if you are in a VAT tax group, list which of your invoice flows are purely between group members and which involve outside customers or suppliers. Only the first list benefits from the exclusion, and your ASP set-up still needs to handle the second from your go-live date. Note that the exclusion ends after December 2028, so build intra-group e-invoicing into your plans rather than switching it off for good.
Second, if your accounting system or ASP stores data outside the UAE, the old location rule no longer blocks you. You still need to keep every e-invoice, credit note and associated data for the full Tax Procedures Law retention period and be able to hand it to the FTA on request, which ties in with the record access expectations in FTA Decision 4 of 2026.
Third, ask your provider how it handles outages now that the 2 Business Day notice is gone. The decision removes the notification duty but does not remove your obligation to issue and report e-invoices on time.
Naqood is FTA-accredited accounting software for UAE businesses. Keeping invoices, credit notes and intercompany entries in one ledger makes it easier to see which transactions fall inside or outside an exclusion like this one.
Frequently asked questions about Ministerial Decision No. 197 of 2026
When does the tax group exclusion start and end?
It starts on 1 January 2027 and lasts 24 months, so it covers transactions up to the end of December 2028. It applies only to business transactions between members of the same tax group registered as a single taxable person under the VAT Law.
Can I now store e-invoice data outside the UAE?
Yes. Amended Article 11 no longer requires storage within the UAE. You must still retain all e-invoices, electronic credit notes and associated data for the period set by the Tax Procedures Law and be able to produce them to the FTA on request.
Do I still have to tell the FTA if my e-invoicing system fails?
The specific requirement to notify the FTA within 2 Business Days of a System Failure has been removed, because Article 12 was repealed. Your obligations to issue, transmit and report e-invoices within the required timelines remain.
Does Decision No. 197 of 2026 extend the 30 October 2026 ASP deadline?
No. The appointment deadline for businesses with revenue of AED 50 million or more is still 30 October 2026, with implementation by 1 January 2027.
This post is for general information and does not constitute tax or legal advice. For how the rules apply to your specific situation, consult a qualified UAE tax adviser. Naqood is an FTA-accredited accounting platform for UAE businesses.