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VAT Registration in UAE for Tax Invoicing

All the businessmen having residency in UAE. And having the business with an annual turnover of AED.375,000 or more should register for VAT in UAE. This has been made mandatory for all the businesses in the UAE crossing the threshold for their annual turnover. If a business is not having residency place in UAE and selling services or products in the UAE, it would still stand eligible for VAT registration.

Businesses need evidence for their supplies when they deal with other businesses. So that it may show that a supply has taken place or any transaction has taken place. The tax invoice acts as evidence in a number of the situation as this document has huge importance for the businesses especially the ones with VAT registration in UAE. This is because it serves as the basis for the input tax recovery.

What is a tax invoice?

A tax invoice is a document that is issued by the VAT-Registered suppliers to the recipients who are registered. This acts as a piece of evidence. And shows that the transaction has taken place regarding the mentioned taxable good or service. This is a very important document for the input tax on any supply. The importance of tax invoice can never be denied for this reason.

As per the Laws and Regulations of VAT Registration Authority in the UAE. There is a defined criterion for an invoice to must have particular details of the business. And transaction to be considered as a complete and standard invoice.

You can consult VAT Compliance Experts at Farahat & Co. to understand the requirements for a standard invoice as per the regulations of FTA. They can also review your current invoice. And guide you better about the missing details. That will make it acceptable for the UAE Taxation Authority.

TRN for New Business in UAE for Tax Invoice

For the businesses, that have just started, Tax registration in the UAE or acquiring a TRN in UAE has equally become important as that of existing businesses. The reason is they will need to provide their customers with a standard Tax invoice with TRN number to be able to do business in the UAE. This has more likely to become an operational requirement for doing business. But there is nothing to worry about as even without an annual turnover data available, new businesses can still register for VAT in the UAE.

Farahat & Co., as registered tax agents in UAE, have all the expertise to help you forecast your annual turnover and also register for VAT as a new business to acquire TRN number.

Way of issuing a tax invoice as per the VAT law in UAE

Understanding the exact way of issuing a tax invoice to the registered supplier is very important for the registered recipient. This may eliminate a number of conditions for the concerned parties.

 Let us take an example;

If a company is known for supplying the apparels being registered under VAT in UAE. And also supplies a number of dresses to a registered customer. The VAT will be applied at a standard rate of 5% to the total amount. The tax invoice, in this case, is issued by the supplier company and not the customer company.

Companies based in UAE must have a good idea about all the details regarding VAT because it has been mandatory in UAE and a little carelessness may harm the business deals for a company or result in losing rightful tax refund. This can further get worst for business by incurring any Tax related penalties for not complying with the VAT regulations in UAE. Issuing a tax invoice with all required details is very important for a business transaction to avoid any problems in the future.

There is a lot of digital assistance also available these days that complies to the Invoicing standards of the FTA and also help businesses in recording and managing data for all the transactions to assist in VAT Accounting.

Standard format for tax invoice

A number of details have been issued by the authorities which should be present in the tax invoice. Every supplier should have those required details in the tax invoice issued by them to their customers.

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The requirement of the tax invoice for input tax recovery

The tax invoice is surely considered as a valid document for the input tax recovery. However, it should be noted that there is a proper eligibility criterion for input tax recovery. That must be considered properly. Also, the tax registration number of the supplier should also be ensured in the issued tax invoice by the registered supplier.

People in the UAE have become familiar with the VAT laws now. It has been more than a year since UAE vat implementation is done. Its high time for the businesses to incorporate the VAT in their legal systems in order to avoid any issues harming their businesses. It is not that difficult as it may sound. So, it would be better for the businesses to understand and apply VAT in the business functions in UAE.

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vat consultant in Dubai

If you are looking for a one-stop solution for incorporating VAT in your businesses, FAR is the answer. It has a number of individuals who are professional at dealing with VAT related matters. It has the best and the most qualified VAT agents who have all the VAT knowledge.

Contact FAR for more vat consultancy services related information and stay safe from penalties and fines that may come your way otherwise.

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions. Read more