The Federal Tax Authority of the UAE government has imposed VAT on various good and services for which the companies or the tradesmen have to register themselves on grounds of their income. The VAT is simply the indirect tax that is charged on products at each step of its production – whether it is manufacturing or in exports, VAT is charged at every step of the trade.
The rate at which VAT is charged is 5% and this amount is paid to the government to improvise the economy and condition of the country. Since these charges are imposed on most of the necessities and luxuries of the people, the end consumers who are buying goods and services from retailers will eventually have to cast a whole in their pocket to pay the taxes.
However, when you look at the guidelines of the contents that are issued by the FTA on grounds of VAT Tax Invoice, you will see that there are two divisions in which the tax invoice is recognized – first, is the Simple VAT Invoice and second, the Detailed Tax Invoice. Even though both the regulations are two sides of the same coin and one cannot be contextualised without clearing the other, therefore we will draw a rough comparison between the two. However, the main focus will be detailed VAT invoice so we will give you a brief outline on the Simple VAT Invoice and a thorough homework on Detailed Tax Invoice.
Simple Vat Invoice includes the details of the supplier of goods and services. These details would simply comprise the name, address and tax registration number in UAE or the VAT number of the supplier. The date of issue of the tax invoice along with a description of the product is also demanded in Simple Vat Invoice. Lastly, the total amount payable and the total VAT chargeable are to be mentioned as well.
Detailed Tax Invoice is used when a registered trades person or business provides supplies to another registered trades person or business. Wholesalers and traders dealing in greater margins of profits and capital will have to make use of a detailed tax invoice. Listed below are the contents of the detailed VAT invoice which must be provided with accurate details so that the FTA finds your trade as per the norms listed by it.
- Name of the recipient
- Address of the recipient
- Temporary Reference Number (or TRN) of the recipient
- The Unique Invoice Number
- Date of issue and date of supply
- Price of the commodity
- The number of goods traded
- The rate of tax
- The outstanding amount in AED
- Discounts (if any)
- Gross Value of Invoice in AED that is to be paid
- Tax Amount in AED that is to be paid
- Reverse Charges (if any)
Remember, when you are filling your details you must re-check and go through your invoice thoroughly to avoid any mistakes or errors that might cause inconveniences later. Once you send your invoice to the FTA, you cannot mend it or edit it unless the FTA approves your request. Therefore, keep in mind the rules and regulations and carefully input the details of the invoice.