To begin with, a tax invoice is an official document which is to be issued by a VAT registered when the taxable supply of goods and services is being made. Talking about the VAT registration in UAE, a tax invoice is to be issued by all registrants for taxable supplies to any other registrant. Here the consideration of the supply is expected to exceed AED 10,000. The following two conditions are to be met for issuing a Tax invoice:
- It is mandatory for the recipient to be registered through Online VAT Registration, and
- As mentioned above, the consideration for the supplies must exceed AED 10,000.
According to the VAT law in UAE, it is compulsory that all the invoices issued under this law should meet the necessary requirements. The government has made it clear to all the businesses that if the Tax invoice issued does not have the required information, then a heavy administrative penalty must be charged.
What does a tax invoice contain on it?
As per the mandatory details that are needed the following information is mentioned on the tax invoice and the same format has to be used by all to insure no administrative penalty is laid upon.
- The 1st thing that a tax invoice consists of is the name, address and TRN of the supplier.
- The format sets Invoice number on the 2nd position. It should be a sequential number, which will be a unique number for every tax invoice being issued.
- On the third position, the date of supply and invoice date are to be mentioned and in case it varies then the same should be mentioned accordingly.
- After these, the next step the name, address and TRN number of the recipient will have to be mentioned on the tax invoice.
- Next there will be a table showing the taxable money. You need to make sure that if the amount that you have mentioned on the tax invoice is converted to AED from any other currency, the rate of exchange has to be shown accordingly.
Moving onto the VAT registration in UAE, a particular criterion is to be followed to get registered for VAT. If we talk about global trade, Dubai is the fifth largest market in the entire world. According to a recent survey, most of the businesses in UAE solely or we can say the majority of businesses supply goods and services to recipients who are not registered under Value Added Tax.
In case the business is not registered under VAT Registration process, it becomes a difficult task to provide the details required in the VAT Tax Invoice. These two documents are related to each other most importantly a company has to obtain VAT Registration in order to obtain a tax invoice.
How Tax Invoice is issued in Dubai?
It is very important to understand the exact way of issuing an invoice to the registered supplier. For example a company is registered under VAT and its business is supplying apparels. Along with that he supplies certain dresses to the registered customer. In this case the VAT applicability will be on the total amount at the rate of 5%. Moreover, the tax invoice issuing person will be supplier company not customer company. There is a need to be careful and have a full understanding of VAT for the companies located in Dubai. Your company may suffer a big loss if there is little carelessness. It may harm the business deals and business will lose the right to get a tax refund. An expert will guide you with all the steps involved in VAT registration and he will also help you with the tax invoice. It is very important in the UAE to maintain the right documents and be able to present the documents as and when required.