Tax invoices are basic documents that must be issued by the registrant when providing taxable goods or services. According to UAE’s value-added tax, if the consideration exceeds 10,000 dirhams, all registrants should issue tax invoices for taxable supplies to other registrants. Therefore, the issuance of tax invoices must meet two conditions:
1. The recipient must register and
2. The consideration for supplies should exceed 10,000 dirhams.
Tax invoice format
Based on the mandatory details required in the tax invoice, the sample format of the tax invoice is as follows:
Note: When the tax invoice is related to the supply for which the payee should pay taxes, it should be stated in the “VAT invoice” that Article 48 of the “VAT Law” stipulates that the payee must pay tax.
Most companies in the UAE (except for retail companies) will deal with consumables for which tax invoices are issued. Since the VAT Law already provides the mandatory detailed information required by any tax invoice issued by the registrant, it is necessary to ensure that all invoices issued under the value-added tax system meet these requirements. If the issued tax invoice does not contain the necessary information, it may result in administrative penalties. In this regard, it is useful for all companies to use a software that automatically selects the required details in the tax invoice. If no mandatory details are provided in the tax invoice, the user will be notified, quickly and The most important thing is to generate tax invoices and keep all the details required in the tax invoice updated. It is also important for the supplier to ensure that the supplier issues tax invoices correctly. Tax invoices are the basis on which the recipient can claim input tax deductions for goods. Therefore, enterprises should take measures to ensure that tax invoices issued based on value-added tax invoices are accurate and complete.
SIMPLIFIED TAX INVOICE UNDER VAT IN UAE
The simplified tax invoice is basically a simplified version of the tax invoice, which has fewer details to mention than the tax invoice.
In either of the following two cases, the registrant shall issue a simplified tax invoice for the provision of taxable goods or services:
Simplified invoice format
Based on the mandatory details required, an example format for simplified tax receipt is shown below
As you can see, the simplified tax invoice requires less detailed information than the tax invoice. Although the same title “Tax Invoice” must be used to prepare the tax invoice and the simplified tax invoice, the significant difference is that in the simplified tax invoice, the recipient’s detailed information is not required.
Therefore, simplified tax invoices are easier to prepare than tax invoices. However, for retail businesses and businesses that provide registrants with a value of less than Dh10,000, it is important to ensure that simplified tax invoices are issued for all dutiable goods or service supplies. Similar to tax invoices, simplified tax invoices are important documentary evidence of taxable supplies that have occurred. These invoices will also be used as the basis for supplier tax refund filing and registered recipients to claim input tax credits. For companies that need to issue simplified tax invoices, the use of value-added tax software can automate the preparation of invoices, which will make it easier. It is important to choose a software that can automatically prepare simplified tax invoices according to the nature of the transaction, fill in the details required in the simplified tax invoice, and maintain the details of these invoices in a safe manner for future reference .
a. The recipient is not registered under VAT or
b. The consignee has been registered under the value-added tax, and the consideration does not exceed Dh10,000
Therefore, simplified tax invoices are invoice types provided by all registered companies in the UAE to consumers or registered companies whose supply value does not exceed Dh10,000.
Understanding the detailed information required in simplified tax invoices is extremely important for such businesses. Let’s take a closer look:
CHECKLIST FOR A TAX INVOICE UNDER VAT IN UAE
Every tax invoice issued by a registered company based on VAT must contain certain mandatory details. This list is useful for all registered suppliers to issue accurate tax invoices that comply with the VAT requirements. This will also be useful for registered supply consignees to ensure that the tax invoices received are complete and can be used for input tax recovery.
1. The words “tax invoice” should be clearly displayed.
2. Supplier’s name, address and TRN
3. Payee’s name, address and TRN
4. The serial number or unique number of the tax bill can be used to identify the tax bill and the order of the tax bill in any order.
5. Date of issuance of the invoice
6. Supply date, if it is different from the issuance date of the tax invoice.
7. Description of the goods or services provided
8. For each product or service, the unit price, the quantity or quantity provided, the tax rate and the amount paid in AED should be provided
9. Discount amount given (if any)
10. total amount payable (AED)
11. If the currency is converted from a currency other than the UAE Dirham, the tax amount paid in AED and the exchange rate applied should be provided
12. If the invoice is related to the material that requires the payee to pay the tax, it indicates that the payee should pay the tax in accordance with Article 48 of the Act
13. If it is to provide sources of goods to other GCC VAT implementing countries, the following details are required:
a. TRN of recipients in other states
b. The statement confirms the supply between the UAE and the country that implements VAT
14. If the supply is a completely zero-rated supply, then if there are or will have sufficient records to determine the taxpayer’s details, there is no need to issue a tax invoice. supply.
15. Tax invoices that can be issued electronically:
a. Suppliers shall be able to securely store copies of electronic tax invoices in accordance with record keeping requirements
b. The authenticity and integrity of the source of electronic tax invoices should be guaranteed.