UAE VAT INVOICE
A UAE VAT invoice is a document that is issued by a registered business in the United Arab Emirates to its customers for goods or services sold. The invoice contains a breakdown of the items sold or services provided along with their corresponding prices, VAT amount, and the total amount payable by the customer. It is a legal document that serves as evidence of the transaction and is required to be maintained by both the seller and the buyer for a specified period of time.
WHAT IS A UAE VAT INVOICE?
A UAE VAT invoice is a document that is issued by a business registered for Value-Added Tax (VAT) in the UAE to a customer for goods or services that have been sold.
WHAT IS THE PURPOSE OF A UAE VAT INVOICE?
A UAE VAT invoice is a document that is issued by a business registered for Value-Added Tax (VAT) in the UAE to a customer for goods or services that have been sold. Additionally, it enables your VAT-registered clients to reclaim any VAT that was charged to them.
THE FORMAT REQUIREMENTS OF A UAE VAT INVOICE
A tax invoice must contain the following information:
- Date on which the invoice was issued and date of supply (if they are different).
- A sequential, unique number based on one or more series which identifies the document invoice number.
- Seller’s legal name, address, and tax identification number.
- Customer’s legal name, address, and tax identification number.
- Description and quantity of the goods sold, or description of the services provided.
- The tax amount payable and the taxable amount for the goods or services sold and mentioned on the invoice in AED.
- Price displayed should be inclusive of VAT.
- If the currency stated on the invoice is not AED, then the amount stated will be converted to AED, according to the exchange rate approved by the central bank at the date of supply.
WHEN MUST A UAE VAT INVOICE BE ISSUED?
The Value-Added Tax (VAT) invoice must also include the business’s VAT registration number and the invoice number.
It is important for businesses to issue VAT invoices correctly and on time, as failure to do so can result in penalties. The invoice should be in Arabic or English Language, and it should be issued within 14 days from the date of supply.
WHAT CURRENCY SHOULD BE USED IN TAX INVOICES IN THE UAE?
The UAE Value-Added Tax (VAT) law requires all taxpayers to issue the invoice in AED. Any invoice in foreign currency should be converted to AED based on the Central Bank exchange rates on that day.
CAN UNREGISTERED BUSINESSES ISSUE VAT INVOICES?
No, unregistered businesses cannot issue UAE Value-Added Tax (VAT) invoices. In order to issue a VAT invoice, a business must be registered for VAT with the Federal Tax Authority (FTA) in the United Arab Emirates (UAE). Only registered VAT businesses are authorized to charge and collect VAT from their customers and issue VAT invoices.
If a business is not registered for VAT, it is not authorized to charge VAT to customers, issue VAT invoices, or claim back input VAT on its own purchases. It is therefore important for businesses to register for VAT if they are required to do so, in order to avoid penalties and fines for non-compliance.
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