MINSEONG / GUIDES

UAE eInvoicing Decision 243/2025 scope and exclusions: Article 3 and the replaced Article 4 explained

Published 24 October 2026 · Ministerial Decisions 243/2025 and 197/2026 read in the official English text on 23 October 2026 · Other official sources last reviewed 22 October 2026 · 12 min read

Most UAE eInvoicing projects start with two questions: which revenue category applies, and when the business has to go live. Both questions assume an earlier one has been answered, namely whether the business and its transactions are inside the system at all. That earlier question is answered by two articles of Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System: Article 3, which sets the scope, and Article 4, which lists what is excluded. Article 4 was replaced in full by Ministerial Decision No. 197 of 2026, which has applied since 1 October 2026.

This guide reads the two articles together, item by item, and turns them into a screening method a finance or tax team can apply to its own sales and purchase flows. It is a general explanation based on our reading of the official English texts, not legal or tax advice. Where we could not confirm a point, we say so. For the specific facts of your business, check the official texts on the Ministry of Finance eInvoicing programme page and speak to a qualified adviser.

Why scope comes before deadlines

The implementation dates in Ministerial Decision No. 244 of 2025 tell a business when its obligations start. They do not decide which transactions those obligations cover. A business with annual revenue of AED 50 million or more is in the first implementation category (the threshold includes exactly AED 50,000,000 following Ministerial Decision No. 66 of 2026), with an ASP appointment date of 30 October 2026 and implementation from 1 January 2027. Yet some of the same business's transactions may still be excluded under Article 4.

The practical consequence is that revenue and scope are two separate tests. Revenue sorts businesses into a timetable; Articles 3 and 4 decide which individual transactions must go through the system. Our revenue threshold guide and deadlines overview cover the timetable. This guide covers the second test.

Article 3: a broad starting point

What Article 3 says

Article 3(a) applies the decision to any Person conducting Business in the State in respect of every Business Transaction, except where the Person or the Business Transaction is excluded under Article 4. Article 3(b) adds any other Person or Business Transaction that the Minister may determine. The drafting is deliberately wide. The default position for a business operating in the UAE is that each of its Business Transactions is in scope, and an exclusion has to be found in the text before a flow can be treated as outside the system.

The defined terms that carry the weight

Person, Business and Business Transaction are capitalised because each is defined in Article 1. Rather than paraphrase those definitions, we recommend reading them in the official text, because small wording differences matter when a flow sits near a boundary. Our glossary of key terms gives plain-language explanations of the terms used across the eInvoicing decisions.

What Article 3 does not say

Article 3 is framed around a Person conducting Business in the State. On the wording we read, it does not make VAT registration or holding a Tax Registration Number a stated condition of scope. We have not found official guidance applying that point to businesses that are not registered for VAT, so we treat their practical position as unconfirmed. The article also contains no separate rule for exports, imports or sales to customers outside the UAE. Our transaction scope guide works through these situations, including sales to Government Entities.

The structure of the replaced Article 4

Decision 197/2026 did not insert a few words into the old exclusion list; it replaced Article 4 as a whole. The Ministry of Finance explained the October amendments in its announcement of 19 October 2026. The replaced article has three parts, and it helps to keep them apart:

Article 4(1) lists Excluded Transactions in seven items, (a) to (g). Each item describes a kind of transaction, usually with a condition attached.
Article 4(2) allows the Minister to determine Excluded Persons by decision.
Article 4(3) allows a Person to take part voluntarily for transactions that would otherwise be excluded.

The most important structural point is that nothing in Article 4(1) excludes a whole business. It excludes particular transactions. An airline, a bank or a public body is still a Person within Article 3, and only its transactions that meet a specific Article 4(1) condition fall outside the system. Decision 197/2026 also added definitions of Tax Group and Taxable Person to Article 1, by reference to the VAT Law, to support the new Tax Group item. Our guide to the Decision 197/2026 changes and our legislation map and amendment history show how the amendment fits with the other decisions.

Article 4(1): the seven Excluded Transactions

(a) Sovereign transactions of Government Entities

Item (a) excludes Business Transactions conducted by Government Entities in a sovereign capacity which are not in competition with the private sector, in accordance with the VAT Law. Article 1 defines Government Entities as federal or local ministries, government departments, agencies, authorities and public institutions, and entities treated as such by Cabinet decisions for VAT purposes. The exclusion has two limits. It covers only sovereign, non-competing activity, so a public body's commercial activity needs separate review. And it runs one way: it covers transactions conducted by the Government Entity, not sales made to it. Government Entities also have their own implementation date (1 October 2027); see our Government Entity timeline.

(b) to (d) Three airline items

Item (b) excludes international passenger transport by an Airline where an Electronic Ticket is issued. Item (c) excludes ancillary passenger services provided directly by the Airline where an Electronic Miscellaneous Document is issued. Item (d) excludes international transport of goods by an Airline where an Airway Bill is issued, but only for 24 months from the date on which the system becomes effective. We have not confirmed the start date of that 24-month period, so we do not give an end date. Each item depends on the document issued, so an airline's other sales, such as domestic services or services sold without the named document, need checking one by one.

(e) Exempt and zero-rated financial services

Item (e) excludes financial services that are exempt from VAT or zero-rated under Article 42 of the VAT Executive Regulation. The VAT treatment of the service, not the type or size of the institution, decides this item. A financial institution's standard-rated fees and its purchases from suppliers are not covered by it. Our sector exclusions guide examines items (a) to (e) in more detail.

(f) Transactions within a Tax Group

Item (f) is new. Business Transactions between members of the same Tax Group are Excluded Transactions for 24 months starting 1 January 2027. The item is limited to members of the same VAT Tax Group: related companies outside the group are not covered, and sales from a group member to anyone outside the group remain in scope. It is also temporary, so groups should plan for intra-group invoices to come back into the system after the 24 months. Our Tax Group exclusion guide explains how to separate intra-group and external flows.

(g) Further transactions determined by the Minister

Item (g) covers any other transaction the Minister may determine. It means the list in Article 4(1) is not fixed; later decisions can add to it. Re-check the legislation list on the MoF programme page before relying on the list as it stands today.

Article 4(2): Excluded Persons

Article 4(2) is a different mechanism from Article 4(1). Instead of excluding a kind of transaction, it allows the Minister to determine Excluded Persons by decision. On the official legislation list as last reviewed on 22 October 2026, we did not identify any ministerial decision determining Excluded Persons. Until such a decision is issued, a business should assume that it remains a Person within Article 3 and that only specific transactions meeting an Article 4(1) condition fall outside the system. Treat claims that a whole sector is "exempt from eInvoicing" with caution unless they point to a decision under Article 4(2).

Article 4(3): voluntary participation

Article 4(3) lets a Person voluntarily issue, transmit, share, exchange and report Electronic Invoices and Electronic Credit Notes even where an exclusion would otherwise apply. The consequence is significant: the provisions of the decision and the related eInvoicing decisions then apply to that Person on a mandatory basis, except the provisions on violations and administrative penalties. That exception matches Article 2(2) of Cabinet Decision No. 106 of 2025, which does not apply to a Person participating voluntarily; our penalties guide explains that decision.

Opting in therefore brings the Article 6 obligations for issuers and recipients into play for the flows concerned. A business might choose it to run one invoicing process across all flows, for example a Tax Group that does not want two processes for 24 months. It should be a recorded decision, taken flow by flow, not a side effect of switching the system on. See our voluntary participation guide and our guide to Issuer and Recipient obligations under Article 6.

B2C is a separate rule, not an Article 4 exclusion

Business-to-consumer sales do not appear in the Article 4(1) list. They are dealt with in Article 5(2) of Decision 244/2025, the implementation decision. A team that looks only at Article 4 will not find the B2C position there, and a team that looks only at Decision 244/2025 will miss the transaction exclusions in Decision 243/2025. A mixed business usually needs both: Article 4 for items such as financial services or intra-group flows, and Article 5(2) of Decision 244/2025 for its consumer sales. Our B2C exclusion guide explains Article 5(2) and its limits.

A five-step screening method

The following sequence applies the two articles to a real business. It is our suggested method, not a procedure set by the decisions.

List every flow. Record each recurring sales and purchase stream with its counterparty type: business, Government Entity, consumer, Tax Group member or foreign party.
Apply Article 3. Confirm that each flow is a Business Transaction of a Person conducting Business in the State. Mark open points, such as an unregistered entity, as unconfirmed rather than out of scope.
Test each Article 4(1) item. For each flow, check items (a) to (g) and record the condition relied on, such as the document issued or the VAT treatment. Record the expiry of temporary items (d) and (f).
Separate B2C. Identify consumer sales and assess them under Article 5(2) of Decision 244/2025.
Decide on voluntary participation and map the rest. Decide whether to opt in for any excluded flow, then plan the in-scope flows against your implementation dates and an accredited service provider under Ministerial Decision No. 168 of 2026. Our ASP accreditation guide, readiness project plan and trading partner onboarding guide continue from here.

Frequently asked questions

Does being above AED 50 million put every transaction in scope?

No. Revenue decides the implementation timetable. Whether a transaction is in scope depends on Article 3 and the exclusions in Article 4, together with the separate B2C rule in Decision 244/2025.

Are sales to a ministry excluded?

Not by Article 4(1)(a). That item covers sovereign, non-competing transactions conducted by the Government Entity itself, not sales made to it. A B2G sale is not a B2C sale either.

Is my whole bank or airline outside the system?

Not under Article 4(1), which excludes transactions, not businesses. Only an Article 4(2) decision could exclude a Person as such, and we did not identify one on the official list as last reviewed.

How long does the Tax Group exclusion last?

Twenty-four months starting 1 January 2027, and only for transactions between members of the same Tax Group.

Can an excluded business choose to use the system?

Yes, under Article 4(3). The decisions then apply to it on a mandatory basis for those transactions, except the provisions on violations and penalties.

For short answers to other common questions, see our UAE eInvoicing FAQ, or check your position with the readiness tool.