E-invoicing coming to the UAE: What you should know

E-invoicing is coming to town.

In a little less than two years, all of us in the UAE are going to be sending invoices to our business and government electronically. 

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As part of e-invoicing introduction, a new breed of businesses is also coming to town. They are called Authorised Service Providers or ASPs. 

It may be a tad difficult for someone who is not familiar with e-invoicing to understand the concept of ASPs and their role. 

Let me try to explain using mobile phones as an analogy.

If you wish to make a call to someone using a mobile phone, both you and the recipient must be connected to a telecommunication network through one or the other telecommunication service provider. 

An ASP’s role under the UAE e-invoicing model is similar to the telecommunication service provider. The e-invoices that you raise will flow from you to the e-invoicing network through your ASP, and the e-invoices that your supplier raises on you will flow to you through the same ASP - just like incoming and outgoing phone calls use the same telecommunication service provider.

Every business in the UAE must therefore appoint an ASP within the deadlines set by the Ministry of Finance – 31 July 2026 for businesses with a turnover of above AED 50 million and 31 March 2027 for businesses with a turnover below that.

Who are these ASPs and where can you find them? 

ASPs are commercial organisations who are (being) approved by the Ministry of Finance to act as such. Their names and details are being published online by the Ministry as and when they are (pre-)approved after elaborate vetting of their adherence to the myriad criteria set by the government. 

These ASPs have the technology to plug into the e-invoicing network in the UAE and automatically transfer the supplier’s invoices in the mandated file format to the customer’s ASP and to the FTA. 

The ASPs typically tend to be three types -  accounting software companies, specialised e-invoicing technology businesses and accounting/consulting firms. 

Some accounting software or ERPs are (being) registered as ASPs and their systems will be Peppol-ready. If you solely use such software for all your purchase and sale transactions and their e-invoicing solution meets all your requirements, then they could be a possible easy choice for you. Specialised e-invoicing technology firms may however be able to provide more features and customisations. Accounting firms, in addition to having specialised e-invoicing technology in-house or through tech partners, have the ability to understand your specific business, accounting and reporting needs and may be better able to marry the e-invoicing solution to those needs. 

Each business will also have to make arrangements with their ASP on the manner of transferring the invoices between their accounting system and the ASP’s system. For outgoing invoices, such arrangements could be anything ranging from a manual entry of invoices into the ASP’s system - thus effectively duplicating the effort involved in invoice creation - to a full integration between your internal and ASP’s systems resulting in seamless transfer of data.  

Similarly, for incoming invoices, full integration can have the benefit of a seamless transfer of invoice data from ASP to your internal system(s), thus saving significant amount of processing time. But of course, integration comes with a cost. 

Your choice of the right ASP for your business depends upon a variety of factors – the features of your accounting system and the ASP’s systems, volume of data, the business’s automation maturity and strategy, reporting and analysis needs, industry and business-specific invoice needs, cost, service levels, etc. are some of the key considerations. 

Choosing the right ASP is one of the most critical decisions for e-invoicing preparedness and requires thinking through the short and long-term business needs carefully. Given the limited time for compliance, businesses must therefore start focusing on this urgently if they have not already.

The author is the Founder and Managing Director of Nishe. Nishe provides accounting, tax, consulting and e-invoicing solutions.