Introduction of simplified invoicing is set to revolutionise the way businesses operate in UAE

Recent changes to the UAE's VAT Executive Regulations, including the introduction of streamlined invoicing, are expected to completely transform how companies conduct business in the area. Mohamed El Baghdady, Head of Tax and Financial Crimes at Habib Al Mulla & Partners said these measures would greatly reduce the administrative burden on businesses and create a more productive corporate climate. 

In the past, businesses had 14 days to submit these bills, which frequently caused issues and hold up record-keeping. According to El Baghdady, the new rule enables companies—particularly retail ones—to submit streamlined tax bills as soon as a sale is made.

This decision was recently made by the UAE as part of larger VAT revisions meant to make tax laws more understandable and encourage compliance. Businesses can increase operational efficiency and lower the possibility of tax filing mistakes by permitting instant invoicing.

This adjustment will be very beneficial to local companies. "Simplified invoicing will help businesses save time and resources, allowing them to focus more on growth and customer service," El Baghdady said. For small and medium-sized businesses (SMEs), which might not have a lot of administrative help, this is especially important.

The revised invoicing criteria will also be attractive to foreign businesses doing business in the United Arab Emirates. The UAE is a desirable location for foreign investment as invoices are issued instantly, which is in line with international best practices.

The VAT changes include measures for a more transparent tax treatment of virtual assets, a relaxation of input VAT recovery criteria, and a simplification of invoicing. When taken as a whole, these changes improve the UAE's business environment.