What is a Tax Invoice?
As per the UAE VAT legislations, a tax invoice is a written paper or electronic document which records the details of a taxable supply (goods or services) which has been made. Tax invoice is important for both sellers and buyers.
Issuing a valid tax invoice is important for suppliers as it will determine the tax period in which the VAT charged should be accounted for and paid to the FTA.
Receiving a valid tax invoice is important for buyers as it will serve as the primary evidence for recovering the VAT incurred as input tax.
When must a tax invoice be issued?
A VAT registered business or individual must issue an original tax invoice and deliver it to the buyer or the recipient in the following scenarios:
When he makes a Taxable Supply (goods or services) subject to VAT at 5%.
When he makes a Deemed Supply (free samples, commercial gifts, or goods used for personal use).
When it is NOT required to issue a tax invoice?
A tax invoice is not required to be issued in the following situations:
When selling goods or services subject to VAT at 0%
When selling goods or services that are exempt from VAT.
When selling within the same tax group
Timing for issuing tax invoice
A tax invoice must be issued within 14 calendar days of the date of supply. With one exception in the case of summary tax invoice
Summary tax invoice
Where a supplier makes several sales of goods or services to the same buyer during a month, the supplier may issue a single tax invoice in the same month.