What Information Must be Included in Your Tax Invoice in UAE?
Tax Invoice is the classy record issued by a VAT registered person to the recipient when a taxable supply of goods or services is done. Article 59 of the Regulations on VAT directs the requisites for a Tax invoice and when it must be issued. A tax invoice must include certain important information such as the inclusion of the word “Tax Invoice”, Supplier’s name, Address, Tax Registration Number, Total amount, and etc. Before continue about the requirements of a tax invoice in UAE, know some basic information about Tax invoices, their types, and other related conditions.
What is Tax Invoice?
A tax invoice is a written or an electronic document which records the details of a standard rated taxable goods or services supply. As per the VAT law, it’s mandatory for all the registrants to issue a tax invoice for all types of taxable supplies made to other registrants if the consideration of such supplies exceeds AED10000.
When Tax Invoice must be Issued
Tax invoice must be issued within 14 calendar days of the date of supply in the UAE. Moreover, it is possible to issue a single tax invoice which covers multiple supplies made in the same calendar month to the same recipient.
For issuing the tax invoice following two conditions must be met:
- The recipient is must be registered
- The consideration made for the supplies must be exceed AED 10000
According to the Federal Tax Authority (FTA) guidelines are divided into two types of Tax Invoices:
- Simplified tax invoice
Simplified Tax Invoice will be for supply less than the specified amount. It is issued in the case when the customers are retail consumers and no need to provide a VAT number. This type of invoice is suitable for supermarkets and other retail industries.
- Detailed tax invoice
Detailed Tax Invoice will be for supply more than the specified amount. It is issued in the process when registered business supplies to another registered user. This type of invoice is suitable for wholesalers and traders dealing in bigger quantities.
What are the key contents of the Tax Invoice?
Contents of tax invoices are classified on the basis of simplified and detailed VAT invoices as follows:
- Simplified tax invoice
- A simple VAT Invoice must be the word “Tax Invoice” at a notable place.
- It must be consist the details of the supplier. Name, Address and Tax Registration Number.
- In addition to the above, it must be contain, Date of issue of the tax invoice.
- The complete description of goods supplied must included.
- Apart from that, most important thing a simple VAT invoice must be having is the Total Amount Payable and Total VAT Chargeable.
- Detailed tax invoice
In addition to the above details that are in Simplified tax invoice, a detailed VAT Invoice will consist of the following details:
- Name, address, and TRN(Tax Registration Number) of the recipient.
- A exclusive invoice number.
- Date of Supply, if it’s different from the date of issue.
- Price per unit, the supplied quantity/volume, rate of VAT and the payable amount in AED.
- Discount, if it is applicable.
- Payable total value of Invoice in AED.
- Payable VAT Amount in AED.
- Statement relating to Reverse Charge, if it is applicable.
How can business entity avoid errors in a Tax Invoice?
According to the law of VAT, every registrant must mandatorily provide adequate information in Tax Invoice, it must not be incomplete or contain any false information otherwise the registrant will be liable to pay administrative penalty. The perfect way to ensure that the invoice contains all the necessary information according to the law is to utilize software that will notify the user if any kind of information isn’t involved and this will also help in making changes to the invoice according to the updates brought in the laws. Adopting such software would save the registrant from making payment of a penalty and issue the invoice to the recipient in a timely manner. In fact businesses should take these process to provide complete and accurate invoices.
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