TAXHELP Blog

VAT Tax Input - Output

VAT Net Tax Payable or Credit?

At the end of each tax period, a VAT registered business will either be due to pay tax to the FTA or get a refund depending on the amount of Input and Output tax incurred in that period.

Output VAT is the amount of tax you charge on the sales of your own goods and services both to ordinary customers and other entities if you’re registered for VAT. Input VAT is the amount of value added tax you’ve paid during the purchases of goods and services during a tax period. If the amount of Input VAT you’ve paid is lower than the amount of Output VAT you’ve charged, you’re due a net tax credit for the amount of the difference between those values. If the amount of Input VAT you’ve paid is larger than the amount of Output VAT you’ve charged, you’re due for a tax refund from the FTA. Continue reading →

VAT Liability - Export of goods and services

VAT Liability – Export of Goods and Services

VAT Liability – Export of Services

A supply of services shall be zero rated if all of the following conditions are met:

  • The services are supplied to a recipient who does not have a place of residence in a GCC State and who is outside of UAE at the time the services are performed, and
  • The services are not supplied directly in connection with: real estate situated in the UAE or any improvement to the real estate or moveable personal property situated in the UAE at the time the services are performed.

Services may also be zero rated where:

  • The services are actually performed outside the GCC or are the arranging of services that are actually performed outside the GCC;
  • The supply consists of the facilitation of outbound tour packages

For the purpose of this rule, “outside the UAE” includes a short term presence in the UAE (less than 1 month), or a presence that is not effectively connected with the supply. Continue reading →

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. Continue reading →

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