Whenever a taxable supply of goods and services are made by a VAT registered person, it is required to issue a tax invoice: a record that contains the details of taxable supplies made. Tax invoice is issued by the supplier in order to dictate the date of supply and therefore determine the tax period in which the output tax should be accounted for. For recipients of the supplies it will be primary documentary evidence to support the recovery of VAT incurred as input tax.
In some cases it is not required to issue a tax invoice:
- When the VAT rate is 0% on the supply and there are sufficient records available to provide the particulars of the supply
- Issuing a tax invoice is being considered as impractical by the FTA.
Get an idea about Buyer-created tax invoices
In some cases the tax invoice can be issued by the recipient, such an invoice will be issued where:
- The recipient is registered for VAT
- The recipient and supplier agree in writing that the supplier won’t issue a tax invoice of any supply to the recipient.
Tax invoices can also be issued by VAT registered agents making supply of goods and services on behalf of the principal supplier. And thus the principal supplier doesn’t need to issue tax invoices on the supply of goods and services.
Tax Invoices must be issued within 14 calendar days of the date of supply. In cases where more than one supply of goods and services is made to the same recipient during a month, then a summary tax invoice can be issued.
A valid tax invoice must contain:
- “Tax Invoice” in words must be clearly displayed
- Name, address and TRN of the supplier
- Name, address and TRN of the recipient, if the recipient is registered for VAT
- A sequential tax invoice number or a unique invoice number
- Tax invoice issue date
- Date of supply
- Description of the goods or services supplied
- The unit price, quantity or volume supplied, the rate of VAT and the amount payable for each good or service must be expressed in AED
- Amount of any discount offered
- Gross amount payable expressed in AED
- Tax amount payable expressed in AED along with rate of exchange applied
- If the invoice relates to a supply under which the recipient is required to account for VAT, a statement and reference to the relevant provision of law
In some cases a simplified tax invoice will be issued, like:
- where the recipient is not registered for VAT
- where the consideration for the supply does not exceed AED 10,000 and the recipient is registered for VAT
Simplified tax invoice must include:
- “Tax Invoice” being clearly displayed
- Name, address and TRN of the registered supplier
- Date of issuing the tax invoice
- Description of the goods or services supplied
- Total consideration and the VAT amount charged
Few points to be remembered:
- It is compulsory that the currency stated on the tax invoice must be the UAE Dirham
- In case of intra-GCC supplies the supplier does not need to issue any tax invoice
- There is no need to issue tax invoices in respect of intra-group supplies
If you have any doubt about issuing tax invoices feel free to call us on 00971-4-331-2332
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