FTA has defined a VAT invoice format in UAE. How to prepare a VAT invoice in UAE is a very important question and task for all businesses. A VAT invoice must have Tax Registration Number (TRN).
All businesses must follow the format of a VAT invoice issued by FTA otherwise they will get VAT fines and penalties in UAE.
According to the FTA, there will be two kinds of invoices for VAT in UAE, Supply for less than the specified amount will be considered to maintain a simplified VAT invoice – specifically for supermarkets and the retail industry. However, supply for more than the specified amount will have to make a detailed invoice.
Preparing VAT Invoice in UAE
To prepare a VAT invoice using the VAT invoice format released by UAE, include all mandatory details and a clear list of the VAT amount charged separately. Here are some important tips for working on VAT invoices and their format:
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Start by including all the mandatory details in your invoice, including the name, address, and Tax Registration Number (TRN) of both the supplier and the recipient. Additionally, include the date of issuance, a unique invoice number, and a description of the goods or services being supplied.
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Ensure that you clearly indicate the amount of VAT being charged on the invoice. This should be broken down separately from the total amount being charged.
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If you are issuing a VAT invoice for zero-rated or exempt supplies, it's important to clearly state that no VAT is being charged.
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Be sure to keep a record of all VAT invoices issued and received. This will help you stay on top of your VAT reporting requirements and ensure that you are properly accounting for all VAT transactions.
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Make sure that your VAT invoice format is in compliance with the UAE VAT regulations. The format should include all the mandatory information and should be presented in a clear and easily understandable manner.
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When sending or receiving VAT invoices, it's important to ensure that they are properly signed and dated. This will help to avoid any disputes or issues down the line.
FTA Tax Invoice Format in UAE
Maintaining the VAT invoice format in UAE is crucial because it helps businesses comply with the UAE VAT regulations. The Federal Tax Authority (FTA) has specific requirements for the format of VAT invoices that businesses must follow. These requirements are designed to ensure that businesses are accurately reporting their VAT transactions and paying the correct amount of VAT.
By maintaining the proper VAT invoice format, businesses can avoid penalties and fines from the FTA for non-compliance. Additionally, proper record-keeping of VAT invoices helps businesses to easily track their VAT transactions, and accurately calculate their VAT liabilities.
A simplified VAT invoice for supply less than the specified amount should consider the below:
- “Tax invoice” in a prominent place
- Name, address & TRN of supplier
- Date of issue
- Description of goods or services
- Total amount payable
- Total VAT chargeable
The VAT invoice for supplies above the specified amount should consider the below:
- “Tax invoice” in a prominent place
- Name, address & TRN of supplier
- Name, address & TRN of the recipient (where they are a registrant)
- A sequential or unique identifying number
- Date of issue
- Date of supply is different to the date of issue
- Description of goods or services
- Unit price, quantity or volume supplied, rate of tax and amount payable in AED
- Value of any discount offered
- Gross value payable in AED
- Tax amount payable in AED
- Statement relating to reverse charge if applicable
VAT on Discounted Invoices
VAT will be charged on the value which is arrived after considering the discount. VAT will be charged on the prices after giving the discount.
The discount will be allowed to be reduced from the value of supply only if the following conditions which are prescribed in UAE VAT Executive regulations are met:
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- The customer has benefited from the reduction in price
- The supplier funded the discount
Tax Invoices Issued in Foreign Currencies
The required contents of a tax invoice issued in foreign currencies will be as follows:
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- the tax amount payable is expressed in AED.
- the exchange rate applied (as per the exchange rates published by the UAE Central Bank on the date of supply).
Rounding on Tax Invoices
Where a tax invoice is required to be issued and the tax chargeable on the supply is calculated as a fraction of a Fils, the value may be rounded to the nearest Fils on a mathematical basis.
Given that the tax amount should be calculated on a line-by-line basis on a full tax invoice as mentioned above, in practice, this means that such rounding if performed, should also be undertaken on a line-by-line basis.
Registered Tax Agent in UAE
BMS Auditing offers Tax Agent Services in the UAE to clients by giving them proper guidance and assisting them to comply with the new Tax provisions in the UAE. Our Tax Experts have handled and controlled a lot of situations and provided the best suitable solutions to the companies to corroborate that businesses will constantly operate in the smooth and best possible way.
BMS is equipped with a team of thriving VAT specialists who can help your business to overcome expected roadblocks such as lack of familiarity with VAT rules & regulations, structure and compliance issues, lack of resources, and lack of a compliant accounting system.
