VAT Invoice Format UAE – FTA Tax invoice Format UAE
VAT Invoice Format UAE
VAT invoice format UAE is an extremely important task for all the businesses registered under VAT. A tax Invoice is an important document to be issued by a registrant when a taxable supply of goods or services is made.
All the businesses must follow the VAT invoice format issued by the FTA to avoid VAT fines and penalties in UAE. How to prepare a tax invoice in UAE is a very critical question and task for all businesses.
VAT-registered business making a taxable supply shall issue an original tax invoice and deliver it to the recipient of the supply. This requirement applies without exception for any supplies subject to VAT at 5%, therefore in the event a taxable supply is made it is a requirement that a tax invoice is both issued and delivered to the recipient.
FTA Tax Invoice Format UAE
Businesses must follow the FTA Tax Invoice Format UAE. A VAT invoice must have a Tax Registration Number (TRN). There are two types of tax invoices:
- Simplified tax invoice
- Full tax invoice
Simplified Tax Invoice
In a simplified tax invoice, line items will be shown at the gross value.
The required contents of a simplified tax invoice will be as follows:
- The words “Tax Invoice” are clearly displayed on the invoice.
- The name, address, and Tax Registration Number (TRN) of the supplier.
- The date of issuing the tax invoice.
- A description of the goods or services supplied.
- The total consideration and the tax amount charged.
At the bottom of the simplified tax invoice, the total consideration is shown (i.e. the total gross value), with a separate line showing the tax included within that value.
For example:
Apples 10.00
Bananas 15.00
Milk 10.50
Total 35.50
VAT 1.69
Full Tax Invoice
In full tax invoice, line items will be shown at the net value.
The required contents of a full tax invoice will be as follows:
- Name, address, and TRN of the recipient.
- A unique invoice number must be sequential
- Date of Supply, if it is different from the date of issue.
- Price per unit, the supplied quantity/volume, rate of tax, and the payable amount in AED.
- Discount, if applicable.
- The payable Net value of the Invoice in AED.
- Payable Tax Amount in AED.
A further requirement of a full tax invoice is to show the total gross amount payable expressed in AED. As a full tax invoice includes several line items, each shall have the net amount payable (excluding the tax) as well as the tax due. The FTA accepts that a full tax invoice does not need to include gross amounts (i.e. inclusive of tax) for each line item, as the total gross amount payable for the invoice shall be stated.
Tax Invoices Issued in Foreign Currencies
The required contents of a tax invoice issued in foreign currencies will be as follows:
- the tax amount payable expressed in AED.
- the exchange rate applied (as per the exchange rates published by the UAE Central Bank on the date of supply).
Rounding on Tax Invoices
Where a tax invoice is required to be issued and the tax chargeable on the supply is calculated as a fraction of a Fils, the value may be rounded to the nearest Fils on a mathematical basis.
Given that the tax amount should be calculated on a line by line basis on a full tax invoice as mentioned above, in practice this means that such rounding, if performed, should also be undertaken on a line by line basis.
By rounding the value on a mathematical basis, it is meant that the tax value stated on the tax invoice should be rounded to the nearest whole Fils (i.e. to 2 decimal places) by applying mathematical logic.
For example:
2.357 AED would become 2.36
9.862 AED would become 9.86
VAT on Discounted Invoices
VAT will be charged on the value which is arrived after considering the discount. VAT will be charged on the prices after giving the discount.
The discount will be allowed to be reduced from the value of supply only if the following conditions which are prescribed in UAE VAT Executive regulations are met:
- The customer has benefited from the reduction in price
- The supplier funded the discount
For example, the value of supply is AED 10,000 and discount is AED 500. In this case, the value of supply will be AED 9,500 which is arrived after considering the discount value. VAT will be charged on AED 9,500.
Xact Auditing will take care of all the concerns related to VAT and provide you advises in light of latest changes in VAT rules and regulation. Let Xact help you while dealing with your tax matters, Contact us.
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