VAT Invoicing in UAE

Federal Tax Authority (FTA) has defined the invoice formats under Value Added Tax (VAT) in United Arab Emirates (UAE). Every VAT invoice must have the Tax Registration Number (TRN).

Businesses shall issue a tax or simplified tax invoice, as the case may be. Further, FTA imposes VAT fines and penalties on businesses not complying with the invoicing rules. 

This article explains the types of VAT invoices in KSA and the mandatory fields to be mentioned in them. Let’s go through them one by one.

Tax invoice in UAE

A tax invoice is an important document a seller shall issue to its buyer. Under UAE VAT, In the case of Business to Business (B2B) sales, issuing tax invoices is mandatory when a VAT-registered buyer pays more than AED 10,000 as consideration for the supply of goods or services.

Also, for consideration of less than AED 10,000, the supplier can choose to raise a tax or a simplified tax invoice.

When the tax invoice is issued for reverse charge supplies, the seller shall mention on the invoice that the recipient must account for the tax.

Every business in UAE, except small and retail businesses, would be issuing tax invoices. Further, correct invoicing is crucial for recipients as the tax invoice is the basis on which they can claim an input tax deduction.

Hence, businesses should ensure that tax invoices issued under VAT are accurate and complete.

Mandatory fields to be mentioned in a tax invoice

The VAT law notified the mandatory fields to be mentioned in a tax invoice as below:

• Tax invoice words in a prominent place
• Name, TRN, address of the supplier
• Name, TRN, address of the recipient
• A unique or sequential identifying number
• Date of invoice
• Date of supply (if it is different from the invoice date)
• Description of goods or services
• Unit price, quantity supplied, tax rate and the amount payable
• Discounts offered (if any)
• Gross value payable
• VAT amount payable
• Reverse charge declaration (if applicable)

Simplified tax invoice in UAE

A simplified tax invoice is a simplified version of a tax invoice. Business needs to mention only a few details in a simplified tax invoice compared to a tax invoice.

A registered person might issue a simplified tax invoice for taxable supplies of goods or services in either of the following cases:

• The recipient is not registered under UAE VAT
• A recipient is a VAT-registered person; however, the consideration for the supply is below AED 10,000

Hence, simplified tax invoices are issued to end consumers or businesses doing transactions worth less than AED 10,000.

Mandatory fields to be mentioned in a simplified tax invoice

A simplified tax invoice in UAE shall consist of the below details:

• Tax invoice word in a prominent place
• Name, TRN & address of the supplier
• Date of invoice
• Description of goods or services
• Total amount payable
• Total VAT payable