Multi-currency invoicing in the UAE: exchange rates, VAT and eInvoicing

Plenty of UAE businesses price in US dollars. Traders buy from overseas suppliers in dollars and sell on in dollars, and service firms bill clients in Europe in euros. Invoicing in a foreign currency is allowed. But a UAE tax invoice still has to carry its key figures in dirhams, and those figures must use one specific exchange rate.

From 1 January 2027, when eInvoicing becomes mandatory for businesses with revenue of AED 50 million or more, those dirham figures stop being a line on a PDF. They become data fields that go to the Federal Tax Authority with every invoice. This guide covers the rules, what eInvoicing adds, and how to set up Zoho Books so the figures come out right.

What a foreign-currency tax invoice must show

Article 69 of the VAT Decree-Law sets the rule: if a supply is in a currency other than the dirham, the amounts on the tax invoice are converted into AED at the exchange rate approved by the Central Bank of the UAE on the date of supply.

Article 59 of the VAT Executive Regulation, in its September 2026 version, lists what a full tax invoice must contain. Three of its items are in AED:

• for each good or service, the amount payable expressed in AED
• the gross amount payable expressed in AED
• the VAT charged expressed in AED, together with the exchange rate applied.

A simplified tax invoice must show its total and its VAT in AED. A tax credit note must show the VAT on the difference in AED (Article 60).

The FTA does not treat this as a formality. Its public clarification on tax invoices states that a foreign-currency invoice that does not show the VAT in AED is not a valid tax invoice for VAT purposes.

In practice, a dollar invoice carries a second column. For a single line of 400 cartons at USD 25:

The invoice also states the rate used: 1 USD = 3.6725 AED, the Central Bank rate for the date of supply.

Which exchange rate, exactly

The FTA's clarification on exchange rates is specific:

• The Central Bank rate, not your bank's rate. The rate is the one published by the Central Bank of the UAE for the date of supply. A market feed, the rate your bank gives you or the rate the customer pays at are not substitutes.
• Every published decimal. The FTA's example is a dollar rate published as 3.672500, which you may not round to 3.7.
• Timing. The Central Bank updates its rates each day on or after 6pm. An invoice raised before 6pm may use the rate already published at the time, which is the previous day's.
• Services you import. Where you account for VAT under the reverse charge, use the Central Bank rate for the date of supply. If the foreign supplier's invoice is not a UAE tax invoice, its invoice date can be treated as the date of supply.
• Goods you import. Customs converts the value on the import declaration, and you may use the Customs rate for the import VAT.

The dirham is pegged to the US dollar, so the dollar rate does not move: the Central Bank's September 2026 rates show 3.6725 every day of the month. Other currencies move. In the same month, the euro went from 4.260441 on 1 September to 4.165249 on 29 September. On a EUR 50,000 sale, that is AED 213,022.05 against AED 208,262.45, and VAT of AED 10,651.10 against AED 10,413.12. Use the wrong day's rate and the VAT figure is wrong.

What eInvoicing adds from 1 January 2027

For a business in scope, the tax invoice is issued as an eInvoice. The Ministry of Finance's list of mandatory fields (V1.1, 28 October 2026) has 51 fields for an electronic tax invoice. Three concern currency:

• Invoice currency code (field 4): the currency the invoice amounts are in
• VAT line amount in AED (field 48): the VAT on each line, in AED
• Invoice line amount in AED (field 49): the amount payable on each line, in AED.

The eInvoicing guidelines (V2.0, 26 October 2026, section 12.2) add the totals. Where the invoice currency is not AED, the gross total in AED goes in a separate field, "Invoice Total Amount with VAT in Tax Accounting Currency", converted at the Central Bank rate, and the "Tax Accounting Currency" field becomes mandatory. The guidelines are explicit that the supplier is responsible for the correctness of these values.

Your eInvoicing provider sends the invoice to your customer's provider and, in parallel, reports the tax data to the FTA. A wrong rate is therefore no longer something an auditor might find on a PDF: it sits in data the FTA receives on every foreign-currency invoice you send.

Three details matter for traders:

• Commercial invoices are lighter. An invoice that is not a tax invoice has 49 mandatory fields, without the two AED line fields.
• Exports still need an eInvoice. If the overseas buyer has no Peppol ID, the supplier must put a predefined endpoint, 0235:9900000099, on the eInvoice. The guidelines also say the export flag applies only when the transaction meets the export conditions, not simply because the buyer is abroad.
• Your customer records feed all of this. Currency, country and tax identifiers come from the customer record, which is why master data is where most eInvoicing projects fail.

For businesses below AED 50 million, eInvoicing is mandatory from 1 July 2027. Our eInvoicing page has the full timeline.

Setting it up in Zoho Books

1. Check your plan. In the UAE, multi-currency transactions are on the Professional plan and above (Zoho Books pricing), the same plans that include the eInvoicing add-on.

2. Turn off the exchange rate feed. By default, Zoho Books fetches exchange rates in real time from Open Exchange Rates, a market feed. Zoho's own UAE help page warns that FTA rules require the Central Bank rate for transactions that include VAT. Go to Settings, Currencies, disable the exchange rate feed, and add the Central Bank rates yourself.

A manually added rate applies from its date until you add a newer one. For dollars, a single entry of 3.6725 holds. For euros, sterling or rupees, someone has to add each day's Central Bank rate before invoicing starts. Because invoices raised before 6pm may use the previous day's published rate, entering the rates first thing each morning works.

3. Fix it before January, not after. Zoho Books stores the exchange rate on each transaction when it is created, so correcting the rate table later will not correct invoices already issued.

4. Give each customer the right currency. Zoho Books allows one currency per contact, and you cannot change it once the contact has transactions, short of deleting them. A customer you bill in both USD and AED needs two contact records. Settle the currency when you set the customer up.

5. Test the invoice and the credit note. Item prices are held in AED and converted at the invoice's exchange rate. Raise a test invoice and a test credit note for a foreign-currency customer, and check that each shows the AED line amounts, the AED total, the AED VAT and the rate. If your template does not, change it now. The eInvoice is built from the same transaction.

6. Book exchange differences properly. If a customer pays a euro invoice when the euro has moved, the difference is an exchange gain or loss, separate from the VAT already charged. Zoho Books reports realised gains and losses. For balances still open at a period end, Accountant, Currency Adjustments revalues them at a rate you enter and posts the difference to the exchange gain or loss account (Base Currency Adjustments, Professional and above). Under IFRS, open foreign-currency receivables and payables are retranslated at the closing rate, so run it at 31 December. Exchange differences then flow into the accounting profit that your corporate tax return starts from.

If your books are kept in USD

Some UAE companies keep their accounts in dollars. For corporate tax, Article 43 of the Corporate Tax Law requires all amounts in AED, converted at the Central Bank rate under the FTA's conditions. FTA Decision No. 13 of 2023 sets the order:

1. the Central Bank spot rate on the transaction date, where your system can convert each transaction or the volume makes it practical
2. otherwise, the Central Bank's average monthly rate, where it gives an acceptable approximation
3. otherwise, the Central Bank's average annual rate.

Apply the method consistently through the tax period, and keep records of the method, the reason for choosing it and the rates used. Whatever currency the books are in, your VAT invoices still need their AED figures.

Before 1 January

If you invoice in foreign currencies and go live with eInvoicing on 1 January 2027, four things to check this month:

1. The exchange rate feed is off and the Central Bank rates are loaded.
2. Every foreign-currency customer has the right currency, country and tax identifier.
3. A test invoice and credit note in each currency show the AED amounts and the rate.
4. Your eInvoicing provider has confirmed which fields it fills from the invoice's exchange rate.

If you want a second pair of eyes, book a free consultation. We will review the currency setup, exchange rates and invoice templates in your Zoho Books with you, and run a test foreign-currency invoice before your go-live date.

Official sources

• Federal Decree-Law No. 8 of 2017 on Value Added Tax, and its amendments (FTA, November 2025)
• Executive Regulation of the VAT Decree-Law, Cabinet Decision No. 52 of 2017 and its amendments (FTA, September 2026)
• FTA Public Clarification VATP004: Use of Exchange Rates for VAT purposes
• FTA Public Clarification VATP006: Tax Invoices
• UAE Electronic Invoice Mandatory Fields, V1.1 (Ministry of Finance, 28 October 2026)
• UAE Electronic Invoicing Guidelines, V2.0 (Ministry of Finance, 26 October 2026)
• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, and its amendments (Ministry of Finance)
• FTA Decision No. 13 of 2023 on converting amounts in a currency other than the UAE dirham
• Central Bank of the UAE: exchange rates for September 2026
• Zoho Books UAE: Currencies (Zoho)
• Zoho Books UAE: Base Currency Adjustments (Zoho)