VAT in GCC
Tax Invoice under VAT in UAE
Tax Invoices require more details to be recorded than a simplified tax invoice. They have to be issued by all registrants for taxable supplies to other registrants, where the consideration for the supplies exceeds AED 10,000. Hence, 2 conditions to be met for issuing a Tax Invoice are:
- The recipient should be registered and
- The consideration for the supplies should exceed AED 10,000.
A detailed VAT Invoice will consist of the following details:
- Name, address, and TRN of the recipient.
- A unique invoice number
- Date of Supply, if it is different from the date of issue.
- Price per unit, the supplied quantity/volume, rate of tax and the payable amount in AED.
- Discount, if applicable.
- Payable Gross value of Invoice in AED.
- Payable Tax Amount in AED.
- Statement relating to Reverse Charge, if applicable.
Note: If the recipient of the tax invoice is required to account for tax, then you must include a statement that the recipient is required to account for tax under Article 48.
The mandatory details that have to be included in a tax invoice have been laid down in the VAT law and it is essential that all invoices issued under the VAT regime meet these requirements. If you fail to include these details you could be dealt an Administrative Penalty.
You have to choose a software that keeps itself updated with all the mandatory UAE VAT requirements
If Tax Invoices issued do not contain the required information, it could lead to an Administrative Penalty. In this regard, it would be useful for all businesses to use a software which would automatically pick the details required in a Tax Invoice, notify the user if any mandatory details are not given in the Tax Invoice, generate the Tax Invoice quickly and most importantly, keep updated about all the details that are required to be given in a Tax Invoice. Ensuring that Tax Invoices are issued correctly by suppliers is also important for the recipient of the supply. The Tax Invoice serves as the basis on which the recipient can claim input tax deduction on the supply. Hence, businesses should take measures to ensure that Tax Invoices issued under VAT are accurate and complete.