A Guide to Date of Supply Rules for UAE VAT Transactions

In the UAE, Value Added Tax (VAT) is calculated on the date of supply of goods or services. The date of supply is a critical element of VAT in the UAE as it is the date on which your obligation to pay tax arises. The date of supply for a transaction refers to the date on which taxes are levied on the goods and services. Since it determines the VAT liability on a transaction, businesses need to understand the rules regarding the date of supply in the UAE.

Tax agents in the UAE can help taxable entities with the date of supply regulations. The rules regarding the date of supply for VAT transactions are:

Date of Supply Rules for Goods and Services

Tax will be calculated on the date of supply of Goods and Services, which will be the earliest of any of the following dates:

1. The date on which the goods were transferred if the transfer was supervised by the supplier
2. The date on which the recipient of goods took possession of the goods when the supplier didn’t supervise the transfer
3. If the goods are supplied with the assembly and installation, the date of supply will be the date on which the assembly or installation of the Goods was completed
4. The date on which the import of goods took place as per the Customs Legislation
5. The date on which the recipient accepted the supply of goods or a date no later than 12 months after the date on which the Goods were transferred or placed under the Recipient of Goods disposal if the supply was made on a returnable basis
6. The date on which the provision of Services was completed.
7. The date of receipt of payment or the date on which the Tax Invoice was issued

Rules for Periodic payments or consecutive invoices

The UAE VAT Decree-Law has stated the rules to determine the date of supply of Goods or Services for any contract that includes periodic payments or consecutive invoices. Tax agents in Dubai can provide further advice on such cases. The date of supply in such cases will be the earliest of any of the following dates, given that it does not exceed one year from the date of the provision of such Goods and Services:

• The date on which the tax invoice was issued
• The date on which the payment is due as displayed on the tax invoice
• The date on which the payment was received

Date of Supply Rules for Special Cases

The specific rules for determining the date of supply for certain special cases are:

1. If the payment is made through vending machines, the date of supply will the date on which the funds were collected from the vending machine
2. In case of deemed supply of goods or services, the date of supply will be the date of their supply, disposal, change of usage or the date of Deregistration, as the case may be
3. For vouchers, the date of supply will be the date of issuance or supply thereafter

 Hire the Best Tax Agents in Dubai

The date of supply is significant for VAT reporting and compliance purposes. It is used to determine the VAT return period in which the VAT liability should be declared and paid to the Federal Tax Authority (FTA). Considering the significance of the date of supply, you are advised to seek the guidance of FTA approved tax agents such as Jitendra Chartered Accountants (JCA).

We are one of the leading providers of VAT consulting services in Dubai with more than 21 years of experience. Our Vat consultants can help you comply with requirements such as VAT registration, return filing, record keeping, financial reporting, VAT refunds and VAT health check services. Failing to ensure VAT compliance in the UAE is an offence that attracts hefty penalties, and therefore consult with JCA today to be on the right side of the law.