Sales between members of a VAT group

In short

When companies register together as one VAT group (the law calls it a Tax Group), sales between members carry no VAT. These sales do not need an eInvoice until 1 January 2029. From that date, each one is issued as a commercial invoice outside the scope of VAT, and each reduction as a matching out-of-scope credit note.

Why eInvoicing needs it

Under the VAT law, a supply from one member of a Tax Group to another member of the same group may be disregarded for VAT. The group files one VAT return under one TRN. So a sale from one member to another has no VAT, and printing it as "zero rated" or "0%" is wrong. It is outside the scope of VAT.

The Ministry of Finance (MoF) eInvoicing guidelines say these sales are still within the eInvoicing system. They are not left out just because they are inside the group. Because group companies often have many internal transactions, the guidelines give a grace period of 24 months starting on 1 January 2027. During the grace period these sales do not have to follow the eInvoicing rules. When it ends, on 1 January 2029, the full rules apply to them.

Each member of the group has its own Tax Identification Number (TIN). For most businesses, the TIN is the first 10 digits of the TRN. In a group it is different: your TIN is your company's own number, shown in its own EmaraTax account. It is not the first 10 digits of the group TRN. The TIN also makes up the UAE network address (Peppol ID) each invoice is delivered to: 0235 followed by the TIN. Each member gets its own Peppol ID, and each member can receive eInvoices from the others.

What good looks like

Two invented members of one VAT group: Al Noor Trading LLC sells to Al Noor Logistics LLC.

	Today until 31 December 2028	From 1 January 2029
eInvoice needed?	No	Yes
Document	Your own internal invoice, outside the eInvoicing upload	Commercial invoice outside the scope of VAT
Reduction	Your own internal credit note	Out-of-scope credit note naming the invoice it reduces
VAT category	Not reported	Outside the scope of VAT
Reason on each line	Not reported	"Supply between members of a Tax Group"
VAT amount	None	None
Seller and buyer identity	Each member's own TIN	Each member's own TIN and Peppol ID

Before, on a typical invoice:

• Line printed "Zero Rated 0%".
• Seller and buyer both showed the group TRN, and nothing else.

After, from 1 January 2029:

• Line shows the "outside the scope of VAT" category with the reason "Supply between members of a Tax Group".
• The invoice goes to the other member's own Peppol ID, built from its own TIN.

The grace period is set by the guidelines, not by a ministerial decision, so the date could change. Check this guide before you plan for 2029.

How to fix it in Tally

1. Go to Gateway of Tally, press Alt+G (Go To), and choose Create Voucher Type. Make a separate sales voucher type for sales to group members, and one for credit notes to group members.
2. Use these voucher types only for other members of your group. Keep them out of your eInvoicing upload until 1 January 2029.
3. In each group member's ledger, record its own TIN, not only the group TRN.
4. Change the print format for these voucher types so lines no longer say "Zero Rated". Use "Outside the scope of VAT: supply between members of a Tax Group".

How to fix it in Excel or another system

Add a column Group member with Yes or No on each customer. Where it is Yes:

• Exclude the invoice from your eInvoicing upload until 1 January 2029.
• From then, set the document to the out-of-scope invoice type, the VAT category to outside the scope, and the reason to Supply between members of a Tax Group.

Record each member's own TIN, for example 1010101002. If you use an ERP, ask your ERP partner to add a group-member flag on each customer that sets the document type and VAT category.

Checklist

• We know our own 10-digit TIN, and the TIN of every other member of our group.
• Sales to group members sit on their own voucher type or series.
• These sales are kept out of our eInvoicing upload until 1 January 2029.
• Lines to group members no longer print "Zero Rated".
• Sales to customers outside the group follow our normal go-live date.

The law

• Federal Decree-Law No. 8 of 2017 on Value Added Tax, as amended, Article 14 (Tax Group registration): https://mof.gov.ae/wp-content/uploads/2025/07/Federal-Decree-Law-No.-8-of-2017-and-amendments.pdf
• Executive Regulation of the VAT Law, Article 12(1)(b) (a supply by one member of a Tax Group to another member may be disregarded).
• MoF UAE Electronic Invoicing Guidelines V1.1, Section 6.3.2 (intra-group transactions: in scope, grace period of 24 months from 1 January 2027), Section 2 and Section 13.2 (each Tax Group member has its own TIN and participant identifier): https://mof.gov.ae/wp-content/uploads/2026/06/UAE-Electronic-Invoicing-Guidelines_V-1.1-01June2026.pdf
• Peppol PINT AE, rule ibr-134-ae (invoice type 480, out of scope of VAT, and credit note type 81): https://docs.peppol.eu/poac/ae/pint-ae/trn-invoice/rule/ibr-134-ae/