A vending machine is an automatic machine in which you can purchase coins or specially designed coins to purchase smaller items, such as snacks, drinks, alcohol, cigarettes, and lottery tickets. This is a common phenomenon in airports, shopping malls and other places. In this case, the supplier places the machine containing the goods that can be operated by the customer without the presence of a salesperson, and the machine itself can distribute the goods.
These machines are placed by suppliers, who often load inventory and collect funds from the machines.
If you are a VAT registered supplier who supplies goods through a vending machine, what is the delivery time? Is it the date of supply, that is, the date of shipment from that machine? Or the date the goods (stored goods) are delivered to such machines?
The answer is no’.
The time of supply through the vending machine is the date when the supplier receives the funds from the vending machine. In other words, when the supplier visits the place where such a machine is located and collects the funds that the customer has deposited into the machine, it will be the supply time for the allocation of goods.
Let us understand this through an example.
Ali Traders put the vending machine in a shopping mall in Dubai. This machine dispenses snacks and drinks. On March 25, 2018, Ali Traders stored snacks and beverages in the machine. On March 27th, 28th, and 29th, 2018, the products were distributed to customers through automatic vending methods that inserted the required coins. On April 5, 2018, Ali traders collected funds from vending machines.
The supply time of the goods stored in the vending machine and the allocation of funds collected from the vending machine
March 25, 2018 March 27, 28 and 29, 2018 April 5, 2018 April 5, 2018
In the above case, the supply time will be April 5, 2018. This is because, for the supply time supplied through vending machines, it will be the date when funds are collected from such machines. Therefore, if the taxpayer has a monthly return, he needs to report and pay the April 2018 VAT. If it is a quarterly report, the tax period for the April to June quarter or the quarterly tax period for the quarter of April should be reported.
Considering the impact on cash flow in the absence of this reserve, the above reserve is the correct framework. Taxpayers who supply goods through vending machines should specify the above-mentioned supply time. Any difference in determining the timing of supply will affect cash flow by paying taxes or fines early. Similarly, it is also very important to track the collection date of the funds so that taxpayers can determine the tax period for VAT to be paid to the FTA.
1. How to determine the supply time of goods
2. How to determine the service time
3. Delivery time when the goods are assembled or installed
4. The delivery time of goods sold or consigned in the UAE can be returned
5. Supply time in the UAE based on VAT continuous supply or progressive billing method