According to the UAE’s value-added tax, recording the occurrence of taxable supplies and the maintenance of these records are essential. Tax invoice is a document issued by the registrant to record the occurrence of taxable supplies. These tax invoices also form the basis for providing VAT returns and documentary evidence supporting input VAT deduction claims. These can be in written or electronic form. Let us learn more about all aspects of UAE VAT invoices.

VAT invoice type

In the UAE, VAT invoices can be divided into two types:

1. Tax invoice

If the supplier’s consideration exceeds Dh10,000, the registered supplier shall issue a tax invoice to the registered recipient.

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2. Simplified tax invoice

In the following two cases, registered suppliers will issue simplified tax invoices:

a. The recipient is not registered under VAT

b. The recipient is the registrant, and the supply consideration does not exceed Dh10,000

Therefore, retail companies and supplying goods to unregistered companies or supplying goods not exceeding 10,000 dirhams to registered persons usually use simplified tax invoices. It is a simplified version of the tax invoice with fewer details to mention.

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Note: If a certain supply is a completely zero-rated supply under the value-added tax (for example, education services, the supply of basic medical care services, etc.), and there are or will have sufficient records to determine the details of the supply, The supplier will not require a tax invoice.

Supply documents provided to other GCC states

When the registrant provides goods or services to other GCC states, the document should not be labeled as a “tax invoice”, and the supply should not be taxed. This document should contain all the details required for the tax invoice and the following other details:

a. Recipient’s TRN (Tax Number)

b. The statement supplies the statement between the UAE and other Gulf Cooperation Council countries.

When should an invoice be issued?

An invoice should be issued within 14 days from the date of provision.

How should I round the VAT amount in the tax invoice?

In the tax invoice, if the value-added tax payable is calculated as a part of a certain proportion, the value-added tax amount can be rounded to the nearest integer according to mathematics, that is, if the proportion is less than 0.5, it will be rounded down The whole number is an integer. The closest fils, and if the score is 0.5 or greater, it is rounded up to the closest fils.

For example: if the value-added tax in the tax receipt is 100.40 dirhams, the value-added tax can be rounded to 100 dirhams, and the value-added tax in the tax receipt is 100.60 dirhams, the value-added tax can be rounded to 101 dirhams .

Which currency should be used for tax invoices?

The currency used in the tax invoice is the UAE Dirham. If the currency of the supply is not UAE Dirhams, the amount shown in the invoice shall be converted to UAE Dirhams based on the exchange rate approved by the Central Bank on the date of supply.

Conditions for issuing electronic invoices

If the registrant issues tax invoices in electronic form, the following conditions must be met:

a. Suppliers shall be able to securely store copies of electronic tax invoices in accordance with record keeping requirements.

b. The authenticity of the source and the integrity of the content of the electronic tax invoice should be ensured.

How long should tax invoices be kept?

From the end of the year in which the invoice is received, all tax invoices received and issued shall be retained for at least 5 years.

For example: the tax invoice issued on January 5, ’18’ should be retained until December 31, 23.

In the case of real estate, tax invoices should be retained for at least 15 years.

Please note that it is extremely important to issue a tax invoice for every dutiable goods or service supply, and to ensure that the tax invoice issued contains the required details. Otherwise, administrative penalties will be imposed. The task of ensuring that each taxable supply is invoiced using the required format and required details can be simplified and automated through the use of software. Companies should evaluate and identify a software that will help them comply with UAE’s VAT regulations faster and more accurately.

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