Tax Invoice - All You Need to Know
An original tax invoice is issued by a UAE business that makes taxable deliveries and is delivered to the recipient of goods or services who is subject to UAE VAT Law. Under UAE VAT rules, all registrants must provide a Tax Invoice for assessable supply to other registrants where the provisions exceed AED 10,000. The requirements for the tax invoice are set out in Federal Law Number (8) of 2017 on VAT, as well as Executive Regulation Numbers 46 of 2020 and 52 of 2017, and taxable firms are required to follow the regulations while producing the tax invoice.
Failure to follow the VAT Law while sending the Tax Invoice may result in administrative penalties, however, the top VAT experts in the UAE can provide experienced advice on the TAX Invoice requirements. Here’s an overview of the Tax Invoice and the legal requirements for VAT registrants:
What Does the VAT Law Say About Tax Invoices?
The Tax Invoice is defined in Article 1 of the VAT Decree-Law No. (8) of 2017 as a written or electronic document in which the occurrence of a Taxable Supply is recorded along with relevant facts. According to UAE VAT Law, the Tax Invoice might be a written or electronic document. According to Article 65 of the VAT Law, registrants who make taxable supplies must issue and send the original Tax Invoice to the recipients of goods and services.
In addition, the registrant who makes a considered supply must issue an original Tax Invoice and give it to a Recipient of Goods or Recipient of Services if one is available or preserve it in his records if one is not available. Businesses can get further information from licensed tax agents in Dubai about the conditions and requirements for tax invoices.
Tax Invoice Rules and Requirements
According to Article 59 (1) of the VAT Law’s Executive Regulations, taxable firms must include the following information on their invoices to comply with VAT obligations in the UAE:
- The words ‘Tax Invoice’ visibly displayed on the invoice
- Name, address, and Tax Registration Number of the Registrant making the supply
- Name, address, and Tax Registration Number of the Recipient where he is a Registrant
- Sequential Tax Invoice number to facilitate the identification of the Tax Invoice
- The date of issuance of the Tax Invoice
- Date of Supply if it is not the same as the date of issuance of the invoice
- Description of Goods or Services supplied
- The unit price, the quantity or volume supplied, the rate of tax, and the amount payable for each good or service articulated in AED
- The amount of any discount if applicable
- Gross amount payable in AED
- Tax amount payable in AED along with the rate of exchange applied where the currency is converted from a currency different from the UAE dirham
- Where the invoice relates to a supply under which the Recipient of Goods or Recipient of Services is required to account for Tax, a statement that the Recipient is required to account for Tax, and a reference to the relevant provision of the Decree-Law
Requirements for Simplified Tax Invoices
When the supply is less than the specified amount and the Recipient of Goods or Recipient of Services is not a Registrant, a simplified tax invoice is produced, as per Article 59 (5) of Executive Regulation Number 46 of 2020 and 52 of 2017. When the clients are retail buyers who do not need to furnish a VAT number, such invoices are typically provided. In the UAE, supermarkets, and enterprises in the retail industry typically send simplified tax invoices.
- The words ‘Tax Invoice’ should be displayed
- Particulars of the Registrant such as name, address, and Tax Registration Number
- Date of issuance of the Tax Invoice
- Description of the goods and services
- Total consideration and the tax amount charged
Penalties on Failure of Compliance with Tax Invoice Requirements
According to the VAT Law, VAT registrants must comply with the conditions of a tax invoice. If taxable persons do to comply with the invoicing, they may face stiff penalties from the Federal Tax Authority (FTA). Taxable firms can avoid penalties by forming a partnership with the top tax agents in Dubai right once. According to article 25 (o) of Federal Law No. (7) of 2017 on Tax Procedures, the following are the principal consequences that taxable businesses face if they fail to comply with UAE VAT legislation.
- AED 5,000 if the taxable person fails to issue the Tax invoice or an alternative document while making any supply
- AED 5,000 if the taxable person fails to comply with conditions and procedures regarding the issuance of electronic Tax Invoices
How can we help?
Failure to comply with the tax invoice requirements under VAT in the UAE will result in severe penalties, necessitating the hiring of top VAT consultants in Dubai, like Alya Auditors.
We are well-known in the business community for offering specialist tax services such as UAE VAT registration, VAT deregistration, VAT compliance / VAT Return, excise tax services, and VAT reconsideration services, among others. Through a trained staff of VAT specialists and licensed tax agents in Dubai, UAE, we ensure that businesses receive effective services. Businesses can ensure compliance with our effective VAT services in Dubai, UAE.