Tax Invoice Under VAT in UAE

Businesses in UAE were required to comply with VAT law starting from January 1, 2018. Complying with VAT is essential for businesses engaging in transactions in goods and services. Moreover, they have to pay attention to related compliance, the most important of which is making tax invoices.

For all the taxable supplies on which VAT is applicable, the supplier needs to issue a VAT invoice. It must have all the details describing the transaction. It is essential for the supplier as a record and for the consumer to get clarity on the amount of VAT charged.

FTA expects some basic details to be included in every VAT invoice prepared by a supplier. By following the FTA-specific requirements of a VAT invoice, suppliers can avoid any violations and hence, penalties.

Consumers receiving the supplies must carefully check the VAT invoice to ensure there is no fraud involved in it. They must check the details of the supplier in the VAT invoice to identify whether they are paying tax to genuine suppliers or not. They can also check the calculation to know the actual price of the product/service and the VAT amount.

For these reasons, we provide a basic checklist to benefit both the suppliers and consumers. Suppliers can prepare their VAT invoices based on this checklist. On the other hand, consumers can compare the VAT invoice received with this checklist to ensure genuineness.

Full VAT Invoice UAE

A full VAT invoice in UAE must include the following details:

The words ‘Tax Invoice’ mentioned on the top
Name, address, and Tax Registration Number (TRN) of the supplier
Name, address, and TRN of the recipient
A unique number to identify the tax invoice that follows a sequence of numbers given to other previous invoices, thereby following the order
Date of issue of tax invoice
Date of supply, if it is different from the date when the tax invoice is issued
Description of the goods or services in the supply transaction
The unit price of the good/service, quantity or volume supplied in this transaction, the VAT rate applicable, and the amount payable
Any applicable discount
Gross amount payable
VAT amount payable in AED, if some other currency was used for the transaction along with the applicable exchange rate

Along with the above necessary details, there are some additional details required if VAT invoices are issued in some specific situations:

If the supply is zero-rated, the supplier may not issue a tax invoice if sufficient records exist that prove the particulars of the supply as zero-rated
If the supply is to another GCC country that has implemented VAT, then the VAT invoice must mention the TRN of the recipient in that country and a statement outlining that the supply transaction is between UAE and the VAT-implementing GCC country
If the supply transaction is such where the recipient is required to pay VAT, then the VAT invoice must include a statement mentioning that the recipient is supposed to account for VAT under the applicable VAT Law

The supplier must issue the VAT invoice on paper. He/she can issue the tax invoice electronically, only if:

It has the required capability to store a copy of the electronic VAT invoice securely as per the recordkeeping requirements of the VAT law
It must guarantee the authenticity of the electronic invoice’s content in regards to its origin and integrity

Simplified VAT Invoices UAE

In addition to the format and particulars of a full VAT invoice, the FTA also provides a format for simplified VAT invoices. This is a simpler version of invoice with the requirement of only a few details.

If the recipient is not registered under the VAT Law, then the supplier can issue a simplified VAT invoice. It is possible for the supplier to issue a simplified VAT invoice even if the recipient is registered under the VAT Law, but in that case, the value of supplies must be less than AED10,000.0.

The difference between a simplified VAT invoice and a full VAT invoice is the number of details required. In the former, there is no need to add the recipient’s details. Thus, it is easier and faster to prepare. Also, a simplified VAT invoice mentions the gross value while a full VAT invoice mentions the net value (excluding tax) and the VAT amount due.

A simplified VAT invoice must have the following details:

The word ‘Tax Invoice’ on the top of the page
Name, address, and TRN of the goods provider
Date of issue of invoice
Description of goods and/or services
The total gross amount and VAT amount charged

Conclusion

Since now you are fully aware of what to include in your VAT invoices, please be careful while preparing them. Include all the particulars accurately to avoid any errors or violations of VAT law. The violations may lead to administrative penalties imposed by the FTA.

You can avoid errors and missing any items by using any VAT software. Another option is to seek professional help for any specific or all work related to VAT compliance. Such tax consultants or advisors can help you with the preparation of VAT invoices, filing VAT returns, and achieving VAT compliance.

About Us

UAE VAT Consultancy is a top-notch firm providing VAT consultancy services to many businesses in UAE. We provide continuous support to our clients to achieve VAT compliance by properly following all the provisions mentioned in relevant laws. As your partner for VAT consultancy services, we help you with:

Preparing VAT invoices
Calculating your VAT liability
Registering for VAT
VAT deregistration
Filing VAT returns
Providing VAT training to your employees
VAT health check
Clarifying your VAT-related doubts
Providing advisory services on VAT
Handling VAT litigations

Our team of tax professionals has immense knowledge of UAE tax laws to give you the right advice. We have good experience in handling VAT compliance of various clients in different industry sectors. We take away the burden of VAT compliance from your head so that you can focus on your core business processes and growth.