Tax Invoice Format Under VAT in UAE
Since the commencement of value-added tax (VAT) from January 1st, 2018, the format of the invoices or bills that usually exchange hands between seller and buyer will change and it is not limited to the inclusion of VAT at five percent on the invoice alone but many other elements also need to be incorporated in invoices in line with Article 59 of Executive Regulations of the VAT Law.
As per the law, invoices should not display "invoice" or "bill"; rather, "tax invoice" should be clearly displayed on it. Also, the tax registration number (TRN) issued to the supplier or seller should also find a place on invoices along with addresses.
The FTA said that four items on the receipt should be clearly marked:
- Tax receipt displayed
- Tax registration number
- Price that includes VAT
- Amount of VAT added
In a brief statement, the FTA called on consumers "to review tax invoices as businesses can’t charge VAT if they were not registered".
According to the guidelines issued by Federal Tax Authority (FTA) in relation to the contents of UAE VAT Tax Invoice, there are two types of Tax Invoice:
Simple VAT Invoice will be for supply less than the specified amount. It is issued in the case when the customers are retail consumers and don’t need to provide a VAT number. This type of invoice is for supermarket and other retail industry.
Detailed VAT Invoice will be for supply more than the specified amount.It is issued in the case when a registered business supplies to another registered user. This type of invoice is for wholesalers and traders dealing in bigger quantities. Here are few of the mandatory requirements in the detailed invoice:
Company Name & Logo
This is very basic, you must very clearly write your companies name on the top of the UAE VAT invoice format. Make sure the name same as it appears in your registration document. If you have a logo, then include that as well, this is optional though.
Tax Registration Number (TRN)
Company name should be followed by the registration number. This will help you as a seller when you are filing VAT returns and also help your buyer if the buyer needs to claim the VAT amount that’s paid. This is also a UAE VAT invoice requirement.
Date on which the UAE VAT invoice is issued.
The unique serial number to easily identify the invoice.
If the payment for an invoice is due in a future date, please provide the same in this section.
Address & other contact details
This section of invoice carries the details of the physical address of your (seller’s) business along with contact number and details of other channels for communicating with your business.
Purchase order Number
A good UAE VAT invoice format must have this. You may come across instances where the buyer would request for your product or services via a purchase order form, you can provide the same PO number in this section.
This part of invoice contains the details of goods and/or services that you would be selling to your client.
Quantity & rate
Against each description please provide the quantity and per unit sales price for each item.
In this section, you need to provide the name of the tax. In case of UAE, it would be VAT and also the tax rate.
This section of invoice contains any specific information that you would like to share with your client. Like the delivery schedule, vehicle number, etc.
Terms & Condition
Last but not the least, please very clearly highlight the terms and conditions of delivering your product and services. Provide details of your return policy and also payment terms. This helps in ensuring you are covered in case of any legal issues. Be very precise and clear.
A tax invoice must include the name, address, and Tax Registration Number (TRN) of the registrant making the supply. An invoice must have a sequential tax invoice number or a unique number and date of issue which enables identification of the tax invoice and the order of the invoice in any sequence. While the invoice should have a clear description of the goods or services supplied, it should also mention the unit price, the quantity or volume supplied, the rate of tax and the amount payable expressed in UAE dirham should be specified.
Each taxable person must also prepare the tax return for each tax period and for each tax while being registered. They must then submit the tax return to the authority and pay tax as specified in the return or any tax assessment within the time limit. The tax authority reserves the right to turn down any incomplete return.
Note: When the Tax Invoice relates to a supply for which the recipient should pay tax, a statement that the recipient is required to account for tax, under Article 48 of the VAT Law should be given in the Tax Invoice.