Tax Invoice Format UAE: All You Need To Know

The tax authority of the federation established rules for the tax invoice format UAE issued for goods and services. Additionally, it states when taxable services are supplied or at the time of issuing these invoices. Also, businesses must meet all guidelines for issuing the tax invoice to avoid legal inconveniences.

In this article, you will be able to find out which entity issues the tax invoice format in the Emirates and what the requirements are. Moreover, the importance of the said invoice and many details that will help you comply with this important tax requirement.

Who Should Issue a Tax Invoice UAE?

Tax Invoice UAE

A UAE tax invoice is a document issued by a VAT-registered individual to the receiver. Likewise, this invoice leaves a record when you deliver some goods or services where you must pay taxes. Furthermore, the executive regulations according to Article 59 show the requirements for a tax invoice and when you must issue it.

Likewise, this invoice must include information such as the name of the supplier, tax registration number, and total amount, among others. Thus, later we will detail more about what the tax bill should contain.

When Should You Issue a Tax Invoice?

The tax invoice format UAE, according to the law, may be issued after 14 days from the date of provision of goods or services. In addition, taxable persons must comply with the conditions established in Article 59 of the Executive Regulation. Additionally, businesses must comply with several regulations related to issuing tax invoices in the UAE.

  • When a company makes any supply, it is obligatory to issue a tax invoice UAE. In addition, the business must issue it and deliver it to the recipient for goods that meet the conditions for this.
  • The issuance of simplified tax invoices does not require the issuing company to show the net value of the items. That is, it does not require you to show the amount without taxes on the invoice.
  • In the case of issuing complete invoices, companies must show both the tax value and the net value. However, they are not required to show the gross value of the transaction on the invoice.
  • Issuing the tax invoice format UAE in foreign currency requires the tax sample in dirhams (AED). Additionally, you must state the exchange rate used for the conversion in the transaction.

What to consider When Submitting a Tax Invoice

Concerning the supply, a special provision will apply to periodic payments or consecutive invoices for goods and services. In addition, the tax invoice format expressed in foreign currency will have the following content:

  • Amount of tax payable expressed in AED.
  • The exchange rate applied.

What are the Tax Invoice Requirements in UAE?

The tax notification must comply with a series of valid requirements by law. Below, you will see the tax invoice requirements UAE in detail:

  • Tax bill in a prominent place
  • The sequential number
  • The date of the invoice
  • Delivery time if it is different
  • Supplier name, address, and TRN
  • Name of the recipient, address, and TRN
  • Description of the goods or services delivered
  • The unit cost, the quantity supplied, the tax rates, and the cost to pay in AED
  • Amount of any discount allowed
  • The gross price payable in AED
  • Tax cost payable in AED
  • If applicable, the exchange rate applied
  • If applicable, a declaration regarding the reverse charge

New amendment on the date of issue of a tax invoice

The new modification on the date of issuance of the UAE tax invoice format came into force on January 1, 2023. Thus, the law says that the issuance of an invoice must be 14 days after the delivery of services or goods. In this case, it differs from the old law, when there were no time limits for issuing the tax invoice.

Importance of UAE Tax Bill Format

If you register your company under VAT, you must ensure that you have the tax invoice format UAE. In this case, the invoice will allow you, as a registrant, to deliver services or any goods that are subject to legal taxes. Your company must have the VAT invoice issued by the FTA to avoid fines and penalties.

In addition, you must know how to prepare the VAT invoice format UAE to present it to the authorities.

UAE VAT Invoice Format Types

There are 2 types of tax invoice format UAE allowed according to the Federal Tax Authority or FTA:

  • Simplified tax bill. They are simple VAT invoices issued for supplies for an amount less than AED 10,000. Moreover, these kinds of invoices are for retail companies and do not need a VAT number.
  • Detailed tax bill. These types of invoices are for companies that provide goods and services to another for an amount greater than AED 10,000. Therefore, the tax invoice must contain more details when you issue it.

What data must be included in a tax invoice format

The decree of the law for VAT in the Emirates establishes that the tax invoice format UAE must contain the following data:

  • Clear display of the word TAX BILL.
  • The name, tax registration number, and address of the registrant making the supply.
  • If you are a registrant: The name, address, and tax registration number of the recipient.
  • A unique number or sequential Tax Invoice number.
  • Date of issue.
  • If it is different from the date of issue of the tax invoice format UAE, you must submit the date of supply.
  • Goods or services provided.
  • For each good or service, the quantity or volume supplied, the unit cost, the Tax rate, and the cost payable expressed in AED.
  • Price of any discount you have offered.
  • The gross amount payable referred to in AED

Also, you must express the tax payment in AED according to the exchange rate that applies when the currency is different from that of the UAE. On the other hand, the tax invoice describes a sub-intro where the recipient of goods or services must declare tax. This declaration made by the recipient must show the tax and a reference according to the law decree.

Data to include in a simplified tax invoice

You can apply this simplified tax invoice format UAE if the recipient of the goods is not registered under VAT. Also, applies if the recipient is a tax registrant but with the consideration for the supply of AED 10,000 or less. Thus, for this type of tax invoice, the data to include is the following:

  • The term TAX INVOICE must be seen
  • Registrant data that makes the supply: name, address, and tax registration number
  • Date of issue of the invoice
  • Services or goods supplied in the transaction
  • The total consideration and the amount of tax collected

Additionally, as stipulated by the FTA, any supplier must comply with the aforementioned data expressed in the tax invoice. Otherwise, the provider or registrant must pay an administrative penalty for non-compliance with laws and regulations. Therefore, make sure you comply with these requirements to avoid these types of problems with the law.

In the same way, a client who received the goods and services that are subject to tax must request the invoice for consideration. This will verify the legality of the transaction made about all deliveries. In addition, this will protect you, if you are the recipient, from fraud, as it provides transparency in operations.

What are the exemptions from issuing a tax invoice in UAE?

The law by decree requires the issuance of UAE tax invoice format in all situations but there are exemptions. Hence, this exemption applies when the issuer making the delivery verifies that the delivery qualifies for 0% tax. Furthermore, there is a vast registry to establish the details of this type of delivery.

What currency should be used on UAE tax invoices?

The monetary amount expressed in the tax invoice format UAE must be converted into dirhams (AED). This is based on the exchange rate accepted by the UAE Central Bank on the date of supply negotiation. In this regard, the Central Bank of the United Arab Emirates publishes the exchange rates available for this service.

Historical rates

The Central Bank published the historical rates by specifying that it will not be necessary to process invoices issued before May 17, 2018. Also, the authorities changed to dirhams the amounts in invoices issued between January 1 and May 16, 2018. Likewise, this should be done through a reliable source as long as it has been used consistently for this.

Companies must use these historical data if the supply date is before May 17, 2018. Likewise, all tax invoices issued after that year must apply to the changes made by the UAE Central Bank. Furthermore, this will be regardless of whether the emitter supplied the goods or services in advance or after the publication of the Bank.

Exchange rates not rounded

To not round off, the Central Bank of the Emirates establishes that the companies must use the full exchange rate concerning the tax bill. For this process, they will use the same number of decimal places published.

Publication schedule

In the United Arab Emirates, the Central Bank updates exchange rates daily starting at 6:00 p.m. on its website. However, it is completely acceptable if you use the rates published the day before.

Import of services: reverse charge element

If companies use services from suppliers that are outside the country, the tax invoice must be in the currency of the exporting country. Thus, companies must use the exchange rate of the Central Bank to cancel the investment obligations of the charge. In this case, it is to calculate the VAT obligation to pay.

Likewise, an unregistered foreign supplier cannot issue a tax invoice. In this case, the commercial invoice date is acceptable as the supply date.

Invoices for imported goods

All invoices for goods brought from abroad received in foreign currency the customs department must convert them to dirhams. Likewise, you must complete the VAT due for this import in box 6 of the VAT declaration. However, keep in mind that the exchange made by customs is not the same as that of Central Bank UAE.

In this case, the customs calculation will prevail for tax or VAT declaration purposes. Likewise, companies will not have to declare any adjustments due to the change using the tax return in box 7.

How Businesses Can Unregistered at Issuance of VAT Invoices

Legal and natural persons registered under the FTA or Federal Tax Authority may opt out of VAT through an online process. Also, the reasons why they can unsubscribe will be due to the following circumstances:

  • They can apply for VAT deregistration after registering with the FTA if their business did not exceed AED 187,500 in 12 months,
  • If your company stops making deliveries subject to tax, you must request a VAT reduction.

Voluntary VAT disclosure

You must make this disclosure through a form issued by the FTA. In it, companies and taxpayers will be able to inform the FTA about any changes, errors in refunds, omissions, or VAT declarations.

In the same way, the voluntary VAT declaration in the Emirates is a form that helps correct errors you have made. This is concerning a refund or filing your VAT return. Additionally, it will allow you to voluntarily disclose errors to avoid a penalty.

How Can You Avoid Errors on a Tax Bill?

Every registrant must provide truthful information in the UAE tax invoice format. Thus, you should not present it incomplete nor should it contain false information because you will have to face administrative sanctions.

Consequently, the tax invoice format UAE is very important if you have business setup in Dubai mainland and other freezones. This is because it is a requirement to market goods and services but you must follow the rules and requirements imposed by law to avoid fines.

If you need help regarding this topic, do not hesitate to contact us, because we are a group of certified professionals at your disposal.

Harneet Bhatia

Harneet-Bhatia-imgHarneet BhatiaShe is a renowned Business Sales and Golden Visa Expert, specializing in facilitating business setups in Dubai. With a comprehensive portfolio of services, she adeptly assists clients in navigating the complexities of corporate bank account creation, addressing fines issues, and managing visa services. Her expertise extends to providing VAT services and obtaining necessary DM approvals, ensuring a seamless and efficient process for her clients.

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