Ministerial Decision No. 197 of 2026: UAE eInvoicing Relief for Tax Groups and Data Storage

Last verified against official sources on 2 November 2026.

What changed: Ministerial Decision No. 197 of 2026 amending Ministerial Decision No. 243 of 2025

The UAE Ministry of Finance has announced Ministerial Decision No. 197 of 2026, which amends Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System. The announcement states that the decision became effective on 1 October 2026.

This is a targeted amendment to the UAE eInvoicing framework. It does not replace the Electronic Invoicing System. It adjusts 3 points that matter immediately for implementation planning: a temporary exclusion for intra-tax-group transactions, a change to electronic invoice data-retention and storage expectations, and repeal of the previous system-failure provisions.

1. Temporary exclusion for transactions within the same tax group

From 1 January 2027, business transactions between persons that are members of the same tax group registered with the Federal Tax Authority as a single taxable person under the Value Added Tax Law will be treated as excluded transactions for a temporary period of 24 months.

This is the most operationally significant part of the amendment for many UAE groups. A group that has been building eInvoicing processes for every internal recharge, management fee, shared-service allocation or intra-group supply should now isolate those flows and confirm which transactions involve persons that are members of the same tax group. The relief is temporary, so it should not be treated as a reason to abandon system capability altogether. It is a timing and scope adjustment, not a permanent removal of all intra-group eInvoicing risk.

2. Data must be retained and available to the FTA, but the UAE local-storage requirement has been removed

The decision also amends the data-retention rule. Electronic invoices, electronic credit notes and associated data must be retained for the period prescribed under the Tax Procedures Law and must be available to the Federal Tax Authority on request.

The key practical change is that the previous requirement to store that data within the UAE has been removed. This matters for businesses using regional or global enterprise resource planning systems, group finance platforms, cloud archiving, outsourced tax technology providers or shared-service centres outside the UAE.

The amendment does not mean that records can be inaccessible, disorganised or controlled only by a foreign vendor. The legal focus is now on retention for the required period and availability to the FTA on request. Businesses should therefore test retrieval, user permissions, audit trails and contractual access rights. Data-location flexibility is useful only if the UAE taxpayer can still produce the required records when asked.

Data hosting and cross-border access also raise confidentiality, cybersecurity and internal-governance issues. For a related discussion of how employee and vendor use of technology can expose business information, see our article on Generative AI Data Privacy Compliance in UAE.

3. System-failure provisions have been repealed

The Ministry of Finance announcement states that the decision repeals the “system failure” provisions, including the earlier requirement to notify the FTA within 2 business days of a system failure.

This is a compliance process change. Businesses that drafted incident manuals, escalation matrices or ERP-support procedures around a 2-business-day FTA notification should review those documents. The repeal does not remove the commercial need to detect failures, preserve invoice data, keep evidence of disruptions and restore systems quickly. It means the specific system-failure provisions described in the announcement, including the 2-business-day notification obligation, have been removed.

Who is affected

The amendment affects businesses preparing for mandatory UAE eInvoicing, especially groups that have already started system design, tax mapping and data-retention planning.

UAE tax groups with internal transactions

The clearest affected category is persons that are members of the same tax group and carry out business transactions with one another. Common examples include group companies that recharge costs, central procurement companies that allocate expenses, head-office entities that bill management or support services, and family-business structures with multiple operating entities inside one tax group.

Those businesses should not assume that every related-party transaction qualifies. The amendment, as announced, refers to transactions between persons that are members of the same tax group. Transactions with related parties outside that tax group, sister entities in another group, overseas affiliates, customers, suppliers and other third parties are not described in the announcement as covered by the temporary exclusion.

Groups using shared finance or ERP platforms

Groups that process UAE invoices through a central ERP instance, global shared-service centre or cloud platform are also affected. The removal of the UAE local-storage requirement may reduce the need for separate UAE-only data hosting, but it increases the importance of proving that records are retained and can be supplied to the FTA on request.

This is particularly relevant where finance data is hosted outside the UAE, where access is controlled by a parent company, or where the taxpayer relies on a third-party application provider. The UAE entity should have clear contractual and technical rights to retrieve electronic invoices, electronic credit notes and associated data.

Mainland UAE, DIFC and ADGM businesses

The amendment concerns the UAE Electronic Invoicing System announced by the Ministry of Finance and the availability of data to the Federal Tax Authority. Businesses should assess it as part of UAE federal tax compliance. A company’s place of incorporation, licensing or establishment in mainland UAE, the DIFC, the ADGM or another free zone does not, by itself, answer whether a transaction is within the announced exclusion. The practical question is whether the relevant persons are members of the same tax group and whether the records fall within the electronic invoicing and tax-record obligations.

Businesses that already built system-failure notification procedures

Some taxpayers and service providers may already have prepared standard operating procedures requiring immediate escalation and FTA notification within 2 business days of an eInvoicing system failure. Those procedures now need legal review to avoid outdated instructions. Internal incident management remains important, but the repealed notification rule should not continue to drive unnecessary regulatory communications.

Key dates, deadlines and penalties

• 1 October 2026: The Ministry of Finance states that Ministerial Decision No. 197 of 2026 became effective on this date.
• 1 January 2027: The temporary exclusion begins for business transactions between persons that are members of the same tax group.
• 24 months: The intra-tax-group exclusion applies for this temporary period from 1 January 2027.
• Retention period: Electronic invoices, electronic credit notes and associated data must be retained for the period prescribed under the Tax Procedures Law.
• FTA access: Those records must be available to the Federal Tax Authority on request.
• System failure notification: The announcement states that the prior system-failure provisions have been repealed, including the requirement to notify the FTA within 2 business days of a system failure.

The Ministry of Finance announcement provided in the researched material does not state any new penalty amount. It also does not state a new deadline for general mandatory eInvoicing onboarding beyond the dates identified above. Businesses should avoid relying on informal summaries and should align project plans with the exact scope of the announced amendment.

Practical steps to take now

Map intra-tax-group transactions separately

Create a list of all business transactions between persons that are members of the same tax group. Separate those flows from related-party transactions that involve persons outside the tax group. This distinction is essential because the announced relief is tied to membership of the same tax group, not to wider corporate affiliation.

Revisit eInvoicing implementation scope

Ask your finance, tax and IT teams whether intra-tax-group transactions were included in phase 1 configuration, testing or vendor budgeting. If so, decide whether the 24-month exclusion changes the order of implementation. Some businesses may still prefer to build capability early, especially if systems are already configured or if the same process is used for third-party invoices.

Update data-hosting and archiving decisions

If your project assumed that all electronic invoices, electronic credit notes and associated data had to be stored in the UAE, revisit that assumption. The amended rule described by the Ministry requires retention for the Tax Procedures Law period and availability to the FTA on request, while removing the UAE storage requirement. Cloud contracts, service-level agreements and group IT policies should reflect that access obligation.

Test retrieval, not just storage

The practical risk is no longer only where data sits. It is whether the UAE taxpayer can retrieve complete, readable and organised records when the FTA requests them. Run sample retrieval tests for invoices, credit notes and associated data. Confirm who can access the system, how quickly data can be exported, and whether audit logs are preserved.

Revise incident and escalation procedures

Remove outdated references to the repealed system-failure provisions and the 2-business-day FTA notification requirement. At the same time, keep internal reporting, evidence preservation and business-continuity steps. A failure to process electronic invoices properly can still create commercial disruption, customer disputes and audit complications even if the specific notification rule has been repealed.

Review vendor and group-service contracts

Tax technology vendors, ERP providers, cloud hosts and group shared-service centres should be contractually required to support record retention and FTA-request readiness. The UAE taxpayer should not depend on informal cooperation from a foreign affiliate or vendor when tax records are requested.

How ProConsult Advocates can help

ProConsult Advocates & Legal Consultants advises UAE businesses, family groups, private-wealth structures and corporate clients on the legal implementation of tax, record-keeping and technology-driven compliance changes. Ministerial Decision No. 197 of 2026 is not just an IT update. It affects transaction scoping, tax-group governance, data access, vendor contracts and internal controls.

We can assist with reviewing the legal impact of the amendment on your UAE eInvoicing roadmap, identifying which intra-group transactions may fall within the temporary exclusion, updating policies that refer to the repealed system-failure notification rule, and reviewing data-hosting arrangements against the amended retention and FTA-access requirement.

Where a business operates across mainland UAE, DIFC, ADGM or other free zones, we can help coordinate the tax, corporate and contractual analysis so that the UAE entity retains practical control over its records. For tailored advice, contact ProConsult Advocates & Legal Consultants.

FAQ

Does Ministerial Decision No. 197 of 2026 cancel UAE eInvoicing?

No. The Ministry of Finance announcement states that Ministerial Decision No. 197 of 2026 amends Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System. It introduces specific changes; it does not state that the Electronic Invoicing System is cancelled.

Are all related-party transactions excluded from eInvoicing for 24 months?

No. The announced temporary exclusion applies to business transactions between persons that are members of the same tax group. The announcement does not state that all related-party transactions, all group transactions or all overseas affiliate transactions are excluded.

Do electronic invoices still need to be stored in the UAE?

The announced amendment removes the previous requirement to store electronic invoices, electronic credit notes and associated data within the UAE. However, those records must still be retained for the period prescribed under the Tax Procedures Law and be available to the Federal Tax Authority on request.

Do businesses still need to notify the FTA within 2 business days of an eInvoicing system failure?

The Ministry of Finance announcement states that the system-failure provisions have been repealed, including the requirement to notify the FTA within 2 business days of a system failure. Businesses should update procedures but continue to manage incidents internally and preserve records.