VAT Invoice in UAE: Requirements and Format Guide

A tax invoice can be defined as a written document that proves the occurrence of taxable supplies and their details. An original copy of this invoice is delivered by VAT-registered business to the recipient, and the VAT-registered business can keep the invoice in the event that there is no recipient. VAT invoices must be issued for all taxable sales. and all tax invoice requirements must be contained correctly and completely in the invoice to avoid any penalties or fine might be applied for Federal Tax Authority. In this article we will clarify all what you need to know about requirements for Issuing a tax invoice in the UAE.

UAE VAT Invoice Requirements

There are two different kinds of tax invoices in UAE; simplified and detailed.

Simplified Tax Invoice Requirements in UAE

Simplified tax invoices are for supplies that are less than the Federal Tax Authority’s predetermined amount of AED 10,000. They are issued when clients or customers are retail buyers without any Tax Registration Number (TRN). A simplified VAT invoice in the UAE is for the retail industry, including supermarkets.

Simplified VAT invoices have to contain the following information:

The label “Tax Invoice” presented visibly on the tax document
The serial number of the tax invoice or a special number by which the tax invoice can be identified and arranged from among a group of invoices
The tax registration number, name, and address of the tax-registered business supplying goods/services
The date wherein goods/services are supplied by the taxable person
Description of products/services supplied
The price of each unit of service or good, in addition to the quantity and volume supplied, the tax rate, and the amount payable in AED
The total amount is payable in AED
Total VAT amount charged
The value of the discount, if offered

VAT Regulations Article 59 provides a guide on the complete format for UAE VAT invoices. A supplier can plan the tax invoice, as well as organize it in accordance with the prerequisite. However, there have to be systems in place that can guarantee tax invoices contain all the information listed above.

FTA Public Clarification (VATP006) Re: VAT Invoices

The Federal Tax Authority of the UAE issued Public Clarification VAT P006. It addresses the requirements for the issuance of tax invoices. This includes the following points:

It’s not acceptable for taxable persons to offer only the option of giving an invoice. A tax invoice has to be given in any circumstance wherein a supply is made
Simplified tax invoices don’t need to show net value or value before tax for every line item
Rounding on VAT invoices should be in the nearest Files (for line-item basis)
When tax invoices are issued in foreign currencies, they must show tax amounts in AED
Full or detailed tax invoices have to show tax value, including net value, for every line item

Read Also: How VAT in Oman Affects the Country

Detailed Tax Invoice Requirements in UAE

Under UAE VAT legislation, detailed tax invoices are to be issued by VAT-registrants for assessable goods or services supplied to other VAT-registered businesses. This is provided that the provisions surpass Dhs10,000. A detailed VAT invoice is often for merchants and wholesalers managing higher amounts of taxable supplies.

A VAT invoice in UAE must contain this information in English/Arabic:

A unique invoice number (sequential, for identification purposes)
The date on which a tax invoice was issued, plus the date of supply (if they’re different)
Legal name, tax registration number, and address of the taxable person
Legal name, tax identification number, and address of the customer
Description, quantity, and type of sold goods or description of provided services
To unite price for goods/services goods, excluding the VAT charge
Rebates or discounts provided (not added in good/service’s unit price)
Total VAT amount payable (must be in AED)
Method for calculating the profit margin
Method for calculating VAT (standard, exemption, or zero rates)
The label “Tax Invoice” presented visibly on the tax document

Can Non-Register Businesses Issue VAT Invoices?

Non-registered businesses or persons for the purpose of VAT in the UAE are not allowed to create and issue VAT invoices. Unregistered persons are liable to pay a fine for issuing tax invoices. Do you need further information or clarification regarding VAT in the UAE? Call us here in VAT Registration in UAE today to talk to seasoned tax professionals!

FAQs: Tax Invoice Requirements

Q1. What should be the currency used in Tax invoices in UAE?

The base currency for all invoices needs to be in AED or UAE Dirhams. If a transaction took place in another currency, a VAT-registered business has to convert the amount in UAE Dirhams using the conversion date of the day provided by the local tax authorities.

Q2. Should VAT invoices be issued for goods/services supplied to an unregistered person?

Yes, detailed VAT invoices are to be issued to unregistered persons for supplies where the supply value exceeds AED 10,000. For supplies under AED 10,000 purchased by an unregistered person, a simplified VAT invoice has to be given up to fourteen days from the date and time of supply. For instance, if a supply took place on the 30th of April 2021, a VAT invoice for this particular supply has to be issued before the 14th of May 2021.

Q3. How long should VAT invoices be retained in the UAE?

Businesses are required to retain VAT invoices and related records for at least 5 years, as per UAE VAT regulations.

Q4. What happens if a business fails to issue a proper VAT invoice?

Failure to issue a compliant VAT invoice can result in penalties imposed by the Federal Tax Authority and may also impact the business’s ability to claim input tax credits.

Q5. Is VAT applicable on all invoices in the UAE?

VAT (currently 5%) is applicable on most goods and services in the United Arab Emirates, except for zero-rated and exempt supplies such as certain healthcare, education, and financial services.

Read Also: VAT Accounting in UAE