E-Invoicing in the Middle East: Driving Digital Tax Transformation Across the Region

e-Invoicing in the Middle East: A Digital Revolution in Tax and Business

Imagine a world where every invoice is issued and received in real-time, seamlessly validated by tax authorities, and instantly integrated into business systems. This is not a futuristic vision - this is the reality of e-invoicing in the Middle East. Governments across the region are embracing mandatory e-invoicing to streamline tax collection, improve efficiency, and help with the standardization of business transactions. From Bahrain to the United Arab Emirates, the shift to electronic invoices is transforming how businesses operate, comply, and grow.

Bahrain's Intention to Introduce e-Invoicing: Paving the Way for Digital VAT Compliance

Bahrain is actively moving toward an electronic invoicing system to enhance VAT compliance and revenue collection. Since increasing its VAT rate to 10% in 2022, the government has prioritised transparency and efficiency. The National Bureau for Revenue (NBR) is consulting the public and designing an e-invoicing framework likely to mirror Saudi Arabia’s phased approach, focusing on real-time tax reporting. This digital transition is expected to minimise tax fraud, provide detailed invoice data, and streamline processes for both businesses and the government. It is possible that a phased B2B mandate will be announced for the end of 2025 or start of 2026.

Egypt's New Approach to Invoicing: Phased Rollout of Mandatory E-Invoicing

Egypt has embarked on a comprehensive digital transformation, making e-invoicing mandatory for all VAT-registered businesses. The Egyptian Tax Authority (ETA) requires electronic invoices for B2B, B2C, and B2G transactions, with a phased rollout that began in 2020. By April 2023, nearly all VAT-registered entities were included, and as of January 2025, new groups of businesses must issue e-receipts. The system uses pre-clearance and continuous transaction control, with invoices submitted in XML or JSON format and digitally signed. Non-compliance can result in exclusion from government tenders, financial penalties, and loss of VAT deductions. This initiative is central to Egypt’s strategy to improve fiscal discipline, transparency, and automation in tax administration. Want to learn more about e-invoicing in Egypt? Head over to our comprehensive blogpost.

Israel: Continuous Transaction Control for Enhanced Oversight

Starting from 1 January 2026, businesses will be required to obtain a tax allocation number for VAT deductions on transactions exceeding 10,000 NIS. This threshold set by the Israeli Tax Authority will be further lowered to 5,000 NIS from 1 June 2026, as part of efforts to tackle the informal economy.

Israel is undergoing a digital transformation of its tax administration through a phased introduction of an electronic invoicing system, which began in 2024. This system mandates real-time communication with the Israeli Tax Authority for invoice validation, aiming to strengthen tax oversight and reduce tax evasion.

Companies operating in Israel should prepare for these changes by reviewing their invoicing procedures, ensuring they meet the new thresholds, and implementing electronic invoicing solutions to integrate smoothly with the tax system, thereby facilitating a seamless transition by the specified deadlines.

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Jordan: Expanding the JoFotara E-Invoicing System

The Ministry of Finance and the Income and Sales Tax Department (ISTD) in Jordan has successfully launched Phase 2 of its JoFotara electronic invoicing system, which became mandatory on 1 April 2025. This phase requires all resident taxpayers with a turnover exceeding JOD 75,000 to issue all B2B, B2G, and B2C invoices electronically through the centralised JoFotara platform. The system ensures that invoices for locally acquired goods and services are tax-compliant and valid for VAT deduction purposes.

Businesses are required to fully integrate their invoicing systems with JoFotara or an approved electronic system to comply with the updated billing regulations. Each invoice must be generated and transmitted through the National Electronic Billing System, with government-issued QR codes embedded for verification and transparency.

The implementation of Phase 2 aims to enhance tax compliance, improve operational efficiency, and increase transparency across business transactions in Jordan. Non-compliance may result in financial penalties, exclusion from government contracts, and invalidation of invoices for tax purposes. Businesses are encouraged to ensure full compliance to avoid disruptions and benefit from streamlined tax reporting and audit processes. 

You can refer to our full blog post on Jordan’s e-invoicing system for detailed insights. 

Oman: Restarting E-Invoicing with a Strategic Partnership

Oman is reigniting its e-invoicing plans after delays, with the Tax Authority signing an agreement with Omantel in May 2025 to build the necessary infrastructure. Oman is actively planning to introduce e-invoicing. The Oman Tax Authority (OTA) originally planned to introduce e-invoicing in 2024. However, the rollout was postponed until further notice. The new system, based on the PEPPOL five-corner model, will be rolled out in phases starting in 2026, with a pilot for large businesses in January and full adoption by 2027. The e-invoicing system is designed to boost transparency, streamline tax collection, and support SMEs by simplifying procedures. Businesses will need to issue electronic invoices in a standardised format and integrate their systems with the national platform.

Saudi Arabia: Setting the Regional Benchmark with FATOORA

Saudi Arabia has been a pioneer in mandatory e-invoicing, launching its FATOORA platform in December 2021. The Tax and Customs Authority (ZATCA) requires all resident taxpayers to generate, amend, and store e-invoices for B2B, B2C, and B2G transactions. The process is being implemented in phases, with the latest waves expanding the mandate to businesses with lower annual revenues through 2025. The system uses real-time API integration and requires invoices in XML format, with unique IDs, hash values, and QR codes. E-invoices must be cleared by the tax authority before being shared with customers, ensuring automation and compliance. Penalties for non-compliance are significant, making early adoption essential.

For a detailed step-by-step guide on Saudi Arabia’s FATOORA e-invoicing system and how it impacts businesses, check out our comprehensive blog post on e-invoicing in Saudi Arabia.

United Arab Emirates: Preparing for e-Invoicing in 2026

The United Arab Emirates is preparing for a major leap in digital tax compliance with the upcoming E-Billing System. Ministry of Finance and the Federal Tax Authority are developing an e-invoicing system based on the PEPPOL DCTCE (Decentralised Continuous Transaction Control and Exchange) model. The rollout, expected to begin in 2026, will require all VAT-registered businesses to issue electronic invoices for B2B, B2G, and eventually B2C transactions. The e-invoicing system will standardise formats, enable real-time reporting, and require integration with accredited service providers. This digital transformation will streamline business operations, improve efficiency, and ensure compliance with UAE tax regulations. With the implementation of e-invoicing, the UAE government will have access to the relevant data in near real-time which will help in providing deep insights to policy makers for identifying areas and sectors that need government support and assistance. Businesses should start preparing now to ensure seamless integration and avoid disruptions when the mandate becomes effective. What strategies can your business use to ensure business practices are compliant Read more here.

Turkey: A Pioneer in E-Invoicing Adoption

Turkey has long been a leader in e-invoicing, with mandatory requirements for a wide range of taxpayers. The Turkish Revenue Administration’s system covers B2B, B2G, and B2C transactions, requiring digital signatures and real-time reporting. Businesses must issue electronic invoices in standardised formats (UBL-TR) and ensure integration with government platforms. Turkey’s mature e-invoicing system demonstrates the benefits of early adoption, including improved transparency, reduced fraud, and streamlined tax processes.

Take Action: Partner with eezi for Seamless e-Invoicing Compliance

As e-invoicing becomes mandatory across the Middle East, businesses must adapt to new regulations, formats, and technology. The transition to electronic invoices will impact every aspect of business operations - from transaction processing to VAT compliance and tax authority reporting. Don’t wait until the last minute: reach out to the eezi team, a global e-invoicing service provider, for expert guidance and seamless integration. Our solutions are designed to help you comply with every phase of e-invoicing in the Middle East, and globally, ensuring your business remains competitive, efficient, and fully compliant as the region moves toward a digital future.