A UAE e-invoice credit note is how you reduce or cancel something you have already invoiced, and under UAE e-invoicing it must itself be an e-invoice document sent through your Accredited Service Provider (ASP). That raises practical questions. Which credit note do you issue? What if the buyer's ASP rejects the invoice? Can you simply edit an invoice you have sent? This guide answers them from the Ministry of Finance's guidelines, and says clearly where the guidelines are silent and you should confirm with your ASP.
Last updated 22 October 2026.
The two kinds of UAE e-invoice credit note
The Ministry's Electronic Invoicing Guidelines list two credit note types for normal billing, plus a self-billed version:
| Document | Used when |
|---|---|
| Electronic Tax Credit Note | A taxable person reduces output tax, for example after a return or a price correction on a tax invoice |
| Electronic Credit Note | A credit against a commercial invoice, which is an invoice for supplies that do not need a tax invoice (exempt or out-of-scope supplies, or sales by a business not registered for VAT) |
| Self-billed Electronic Tax Credit Note | The buyer issues the credit note for the supplier under a self-billing arrangement. Commercial invoices cannot be self-billed |
In the VAT law, a tax credit note is the document that records an amendment to reduce or cancel a taxable supply. That is why it is the tool for corrections, not an edit to the original invoice.
Which document do I issue? A quick guide
| What happened | What the guidelines point to |
|---|---|
| Customer returns goods or you agree a price reduction after invoicing | An electronic tax credit note (or an electronic credit note for a commercial invoice) |
| You need to adjust a provisional invoice | There is no provisional category. Issue a credit note, or an additional e-invoice for the extra amount |
| A summary invoice ends up with a negative total | It must be documented as a credit note, not an invoice |
| Retention is held back on a contract | Keep the retention calculation on a separate commercial document. It should not appear on the e-invoice, and a tax invoice is issued when the retention falls due |
| You sent an invoice with a data error | Check first whether it was accepted. If it was rejected, it was not issued (see below). If it was accepted, confirm the correction route with your ASP |
What happens when an invoice is rejected
In the five-corner model, your buyer's ASP validates every invoice it receives. If validation fails, the buyer's ASP confirms the failure to your ASP and to the FTA, and no tax data is reported for that invoice. The confirmation then comes back to you through your own ASP.
In practice that gives you a simple rule. A rejected invoice has not been issued, so you fix the data and send it again, and you do not create a credit note to cancel something that never went through. The guidelines also tell you to agree an error-resolution model with your ASP before go-live: who watches rejections, how fast, and who fixes the data.
Can I edit an invoice I have already sent?
The guidelines do not describe editing an issued e-invoice. They describe credit notes for reducing or cancelling a supply and additional invoices for extra amounts. Treat an accepted invoice as final. If you are unsure how to correct a specific error, ask your ASP for its documented correction flow and ask your tax adviser how it affects your VAT return.
Fines for late credit notes
Under Cabinet Decision No. 106 of 2025, a credit note that is not issued or sent on time carries a fine of AED 100 per credit note, capped at AED 5,000 per month. That cap is separate from the cap for late invoices. Our guide to UAE e-invoicing penalties has the full table and worked examples.
Build credit notes into your process before go-live
- Make sure every system that issues invoices can also issue credit notes in the same flow, including tills for returns.
- Record which original invoice each credit note relates to. Check with your ASP whether your scenario requires the reference. It is good practice either way.
- Test a credit note end to end during the voluntary phase, not only invoices.
- Decide who approves credit notes, because each one affects output tax.
Credit notes are one of the data-quality checks in our e-invoicing data readiness checklist.
Frequently asked questions
Is a UAE e-invoice credit note different from a tax credit note?
Yes. A tax credit note relates to a tax invoice and reduces output tax. A credit note relates to a commercial invoice, meaning a supply that does not need a tax invoice.
What if the buyer's ASP rejects my invoice?
The rejection is reported back to you through your ASP and no tax data is reported. Fix the data and resend. Do not issue a credit note for an invoice that was never accepted.
Can a credit note have a negative total on a summary invoice?
No. If a summary invoice would be negative, it has to be documented as a credit note.
Do credit notes also go through the ASP?
Yes. Credit notes are e-invoice documents, exchanged and reported through your ASP like invoices.
