The definition from the source
The table in Chapter 6.2 of Guidelines 1.1 classifies a transaction by supplier and buyer. In: B2B, B2G, G2B and G2G. Out: B2C, G2C, C2B and C2C, meaning anything whose party is "a natural person not carrying on a business". Ministerial Decision 243 of 2025 is the basis. And note the scope applies "regardless of tax registration status": a business not registered for VAT issues an electronic "commercial invoice" instead of a tax invoice.
Examples
| Transaction | Kind | In scope? |
|---|---|---|
| A restaurant sells a meal to a customer at the table | B2C | No |
| The same restaurant signs a catering contract with a company for its staff | B2B | Yes |
| The vegetable supplier invoices the restaurant | B2B | Yes, and the restaurant receives it electronically |
| A clinic invoices a patient paying cash | B2C | No |
| The same clinic invoices the insurer for the same patient | B2B | Yes |
| An online shop sells to individuals | B2C | No |
| The shop buys its stock from a wholesaler | B2B | Yes (incoming invoice) |
| A subcontractor invoices the main contractor | B2B | Yes |
| A consultancy invoices a ministry or a municipality | B2G | Yes, from day one |
| A licensed freelancer designs a logo for a company | B2B | Yes |
| The same freelancer designs a wedding invitation for an individual | B2C | No |
| A free-zone company sells to a mainland company | B2B | Yes; the free zone does not exempt |
| A government entity sells a sovereign service (a licence, a fee) to a company | Sovereign G2B | Excluded under the three conditions in Chapter 7 |
Three common mistakes
- "I sell to individuals, so I am out." If even one of your customers is a company or a government entity, your transactions with it are in scope, and there is no minimum count. More importantly, your purchases from suppliers are always B2B, and their invoices will reach you electronically from January 2027 if they are large businesses.
- "My revenue is under AED 50 million, so I am exempt." The threshold decides when you comply (1 July 2027), not whether.
- "I am not VAT-registered, so it does not concern me." It does; the difference is the kind of e-invoice (commercial instead of tax).
How to measure your actual obligation
Open the last 12 months of invoices and split them: how many to companies and government entities, how many to individuals. The first number is what binds you; the second is what you can set aside for now. Then add a purchases column: how many invoices you receive from suppliers, because receiving them is as much part of the obligation as issuing them.