Foreign currency invoices: exchange rate and AED

In short

An invoice in US dollars, euros or any currency other than the UAE dirham (AED) must state the exchange rate it used, plus the VAT amount and the total payable in AED. The lines stay in the invoice currency. Your accounts team records the rate on each foreign currency invoice when it is raised.

Why eInvoicing needs it

VAT in the UAE is reported in AED. The VAT Law says that when a supply is made in another currency, the amounts on the tax invoice are converted into AED at the Central Bank's rate on the date of supply. The Executive Regulation adds that the invoice must show the tax payable in AED and the exchange rate applied.

eInvoicing makes this a compulsory field. Every eInvoice in a currency other than AED carries:

• the invoice currency (for example USD),
• the tax currency, which is always AED,
• the exchange rate to AED,
• the VAT total in AED.

The total payable in AED is also stated. An invoice in USD with no exchange rate is rejected, even if it is zero rated.

What good looks like

Al Noor Trading LLC sells goods worth USD 10,000.00 plus 5% VAT to a customer in Dubai on 15 March 2027:

Field	Before	After
Invoice currency	USD	USD
Lines total	USD 10,000.00	USD 10,000.00
VAT 5%	USD 500.00	USD 500.00
Total	USD 10,500.00	USD 10,500.00
Exchange rate	Missing	1 USD = 3.6725 AED
VAT in AED	Missing	AED 1,836.25
Total payable in AED	Missing	AED 38,561.25

The AED figures are the USD figures times the rate: 500.00 x 3.6725 = 1,836.25, and 10,500.00 x 3.6725 = 38,561.25.

A zero-rated export invoice in EUR to a buyer abroad prints the same block: the EUR rate published for the date of supply, VAT in AED 0.00, and the total in AED.

Which rate. Use the rate the Central Bank of the UAE publishes for the date of supply, with all its decimals. Do not round 3.6725 to 3.67. For USD the rate is fixed at 3.6725 by the dirham's peg to the dollar. For EUR, GBP and other currencies, the rate changes daily, so take it for the right date. Print it as "1 EUR = x.xxxx AED".

How to fix it in Tally

1. Turn on multiple currencies: press F11 (Features) and set Allow multi-currency to Yes.
2. Create each currency under Alt+G (Go To) > Create > Currency, with its symbol and two decimal places.
3. Enter the rate for each date under Alter > Currency. Use the Central Bank rate for that date (3.6725 for USD).
4. Set the currency on each foreign customer's ledger, so their invoices are raised in that currency.
5. In the Sales voucher, check the rate of exchange shown against the foreign amount. Correct it if it is not the rate for the date of supply.
6. Make sure the invoice prints the rate, the VAT in AED and the total in AED. If your format does not, ask your Tally partner to add these three items and to export them with the invoice.

How to fix it in Excel or another system

Add these columns to your invoice template or export:

Column	Format	Example
Invoice currency	ISO 3-letter code	USD
Tax currency	Always AED	AED
Exchange rate	Number, all decimals published	3.6725
VAT total in AED	=ROUND(VAT*rate,2)	1,836.25
Total payable in AED	=ROUND(total*rate,2)	38,561.25

Fill the rate from a small table of dates and rates, so nobody types it per invoice. Leave the AED columns empty on AED invoices.

If you use an ERP, ask your ERP partner to store the rate on each foreign currency invoice, send AED as the tax currency, and use one rate precision across every print and export.

Checklist

• Every non-AED invoice states the exchange rate to AED.
• The rate is the Central Bank rate for the date of supply, with all decimals.
• VAT in AED and the total payable in AED are printed.
• Zero-rated foreign currency invoices also carry the rate.
• Lines stay in the invoice currency.

The law

• Federal Decree-Law No. 8 of 2017 on Value Added Tax (VAT Law), Article 69: amounts on a tax invoice in another currency are converted into AED at the exchange rate approved by the Central Bank at the date of supply. UAE Ministry of Justice legislation portal
• Executive Regulation of the VAT Law, Article 59: the tax invoice shows the tax payable in AED and the exchange rate applied where the currency is not AED.
• Peppol PINT AE specification, rule IBR-159-AE: the currency exchange rate (BTAE-04) is required when the invoice currency (IBT-005) is not AED. PINT AE rule IBR-159-AE
• Peppol PINT AE business rules IBR-053 (VAT total in tax accounting currency, IBT-111) and IBR-077 (tax accounting currency, IBT-006, differs from the invoice currency). PINT AE business rules
• MoF UAE Electronic Invoicing Guidelines, section 12.2 items 16 and 17: the VAT amount and total payable in AED are mandatory, converted at the Central Bank rate, and the tax accounting currency is mandatory when the invoice is not in AED. MoF PDF