Tax Invoice is a written or electronic archive in which the taxable person records complete details of taxable supplies made during the financial year. The Federal Law Number (8) of 2017 concerning the Value Added Tax (the VAT Law) sets down the necessary elements required for a Tax Invoice along with the Executive Regulation Number 52 of 2017 concerning regulations on VAT (the VAT Regulation). It is fundamental that all taxable activities issued under the VAT administration meet these prerequisites. If a Tax Invoice issued don’t fit the required criteria, it could prompt an Administrative Penalty. Henceforth, organizations should take measures to guarantee that Tax Invoices issued under VAT are precise and complete.
Under the VAT law in UAE, a Tax Invoice is to be issued by all registrants for assessable supplies to other registrants, where the provisions surpass AED 10,000 (UAE Dirhams ten thousand).
There are two types of tax invoices; simplified VAT invoice and a detailed VAT invoice. The simplified VAT invoice is for supplies less than the specified amount. It issues when the clients are retail purchasers and don’t have to give a VAT number. This kind of receipt is for supermarkets and retail industry. Detailed VAT invoice is for supply more than the predetermined sum. This sort of revenue is for wholesalers and merchants managing in higher amounts.
1) A simplified Tax Invoice must comprise of the following specifics:
- “Tax Invoice” evidently presented on the invoice.
- The Name, Address, and Tax Registration Number (TRN) of the Registrant.
- As per Article (25) of the VAT law, the date on which goods the company or the taxable person transfers the products should be present on the tax invoice.
- As per Article (27) of the VAT law, a description of the Goods or Services supplied should be there on the tax invoice.
- The total Tax amount charged.
2) A detailed tax invoice shall comprehend all of the following particulars:
- The words ‘Tax Invoice’ visibly presented on the invoice.
- The name, address, and TRN of the recipient.
- The name, address, and TRN of the Recipient where he is a Registrant.
- A unique Tax Invoice number which enables identification of the Tax Invoice and the order of the tax Invoice in any arrangement of invoices should be present on the invoice.
- The date of issuing the Tax Invoice.
- The date of supply if different from the date of the Tax Invoice which the company issues.
- An explanation of the Goods or Services supplied.
- The unit price of goods or services, the quantity supplied, the rate of Tax and the amount payable articulated in AED.
- The amount of any discount if applicable.
- The gross amount payable expressed in AED.
- The Tax sum payable expressed in AED together with the rate of exchange applied where the currency is different from the UAE Dirhams.
Article 59 of the VAT Regulations provides a complete format of the Tax Invoice. The supplier can plan its tax invoice and organize in light the prerequisite, yet needs to guarantee that the tax invoice has all the data mentioned above.