Vat Tax Invoice

All about VAT Invoices in the UAE

With the introduction of VAT, the Federal Tax Authority (FTA) is implementing VAT Invoices. Two types of invoices are being introduced – regular and simplified. Before we take a look at what information should be displayed on each of them, let’s first consider what a VAT Invoice is:

  • Written document which records the details of a taxable supply made
  • Can only be issued by a VAT registered business
  • Invoice must be issued within 14 calendar days of the date of supply
  • Need to be kept for at least 5 years

The issuance of a valid tax invoice may dictate the time of supply, and therefore determine in which tax period the output tax should be accounted for. A VAT registered business must issue a tax invoice to the recipient of a domestic taxable supply of goods and services. In certain conditions, the customer may be able to issue a “self-billed” tax invoice on behalf of the supplier. The receipt of a valid tax invoice is the primary documentary evidence to support the recovery of VAT incurred by the purchaser.

A regular VAT Invoice should contain the following:

  • “Tax Invoice” clearly displayed
  • Name, Address and TRN of the supplier
  • Name, Address and TRN of the recipient if recipient is also registered for VAT
  • Sequential Tax Invoice number, or a unique number which enables identification of the Tax Invoice and the order of the Tax Invoice in any sequence of invoices
  • Date of issuance
  • Date of supply (if different from date of issuance)
  • Description of goods and services supplied
  • The unit price, quantity and volume, rate of tax and amount payable expressed in AED for each good or service
  • The amount of discount offered
  • Gross amount payable in AED
  • Tax amount payable expressed in AED together with rate of exchange applied
  • Where the recipient is required to account for tax, a statement that this is the case and reference to the relevant provision of the law

A simplified VAT Invoice should contain:

  • “Tax Invoice” clearly displayed
  • Name, address and TRN of the supplier
  • Date of issuance
  • Description of goods or services supplied
  • Total consideration and tax amount charged

For claiming input VAT, the invoice along with VAT should be paid within six months of receipt of invoice. If not paid within six months, input VAT needs to be reversed.