A tax invoice is more than a request for payment. Under UAE VAT, it is the document your customer relies on to recover input tax, and it is one of the first things the Federal Tax Authority checks in an audit. If it is missing required details, your customer’s VAT claim is at risk, and so is your relationship with them.
What a full tax invoice must show
A full tax invoice should include:
- the words “Tax Invoice” clearly displayed;
- the supplier’s name, address and Tax Registration Number (TRN);
- the recipient’s name, address and TRN (where the recipient is registered);
- a sequential invoice number and the date of issue;
- the date of supply, if different from the date of issue;
- a description of the goods or services;
- for each item, the quantity, unit price, VAT rate and VAT amount;
- any discount offered;
- the total amount payable and the total VAT, shown in UAE dirhams.
When a simplified tax invoice can be used
A simplified tax invoice, with fewer details, may be issued where the recipient is not registered for VAT, or where the recipient is registered and the value of the supply does not exceed AED 10,000. It still needs to identify the supplier and its TRN, the date, a description of the supply and the VAT charged.
Timing
Tax invoices should generally be issued within 14 days of the date of supply. Issuing them late can create confusion over which tax period the VAT belongs in.
Credit notes
When you reduce the value of a supply after invoicing, for example for a return or a discount, a tax credit note is needed so both you and your customer can adjust the VAT. It has its own content requirements, similar to those of a tax invoice.
A quick check
Take a sample of your recent invoices and check them against the list above. Many businesses find one recurring gap, often a missing customer TRN or VAT shown only in a foreign currency, that is easy to fix once spotted.
If you would like us to review your invoice templates, please get in touch.
This article is general information based on the rules as we understand them at the date of publication. It is not advice on your circumstances. Laws and practice change, so please speak to us before acting on it.
