A Guide to UAE Tax invoices and Penalties for Non-Compliance

The Executive Regulation of Federal Decree Law No 8 of 2017 defines a tax invoice as a “written or electronic document in which the occurrence of a Taxable Supply is recorded with details pertaining to it.” As per the Federal Decree-Law No. (8) of 2017, a tax registrant making a taxable supply is required to issue an original tax invoice and deliver it to the recipient of goods or services. UAE VAT administrative penalties may apply if businesses violate the mandatory invoice requirements. VAT consultants in Dubai can help you meet the mandatory tax invoice requirements.

To ensure compliance with UAE tax invoice requirements, you need to understand the Federal Tax Authority’s mandates (FTA). You can use the below article as a useful guide to the UAE tax invoice requirements and penalties for non-compliance. Read ahead to ensure compliance with tax invoice requirements in the UAE:

Conditions & Requirements for Issuing Tax Invoices in the UAE

As per the UAE VAT Decree Law, the following conditions and requirements apply for the issuance of tax invoices:

1. Tax registrants making taxable supplies need to issue an original Tax Invoice and deliver it to the recipient of Goods or recipient of services
2. Tax registrants making a deemed supply are required to issue an original Tax Invoice and deliver it to the recipient of goods or services if available or keep it in their records if there is no recipient of goods or services

When should you issue a tax invoice in the UAE?

Tax registrants are required to issue a tax invoice within 14 days of the date of supply. Consult with VAT consultants in Dubai to know further about the date of supply.

What are the requirements for a tax invoice in UAE?

The Executive Regulation of Federal Decree Law No 8 of 2017 has described the mandatory details a tax invoice must contain. The following details must be included in a tax invoice:

1. A clear display of the words ‘Tax Invoice’
2. The name, address, and Tax Registration Number (TRN) of the registrant who made the supply
3. The name, address, and TRN of the Recipient if he is a tax registrant
4. The sequential Tax Invoice Number that enables the identification of the Tax Invoice and the order of the Tax Invoice in any sequence of invoices
5. The date on which the tax invoice has been issued
6. The date of supply if it is different from the issuance date of the tax invoice
7. Description of the supplied goods or services
8. For each Good or Service, the unit price, the quantity or volume supplied, the rate of Tax and the amount payable expressed in AED
9. The amount of any discount offered.
10. The gross amount payable expressed in AED
11. The Tax amount payable is expressed in AED together with the rate of exchange applied where the currency is converted from a currency other than the AED
12. Where the invoice relates to a supply under which the Recipient of Goods or Recipient of Services is required to account for Tax, a statement that the Recipient is required to account for Tax, and a reference to the relevant provision of the Decree-Law

Tax Invoice Non-Compliance: What are the Administrative Penalties?

Tax registrants who violate the rules for issuing a tax invoice in the UAE will incur penalties from the FTA. VAT consultants in Dubai can help you to stay compliant and avoid the administrative penalties imposed by the FTA. The following are the UAE VAT administrative penalties related to tax invoices:

• If a person fails to issue a Tax Invoice or the alternative document when making any supply, a penalty of AED 2,500 for each detected case will apply
• If a taxable person fails to comply with the conditions and procedures regarding the issuance of a Tax Invoice and a Tax Credit Note electronically, a penalty of AED 2,500 for each detected case will apply

Consult with the Best VAT Consultants in Dubai, UAE

Businesses must comply with the conditions and requirements for issuing tax invoices in the UAE to avoid administrative penalties. Seeking assistance from VAT consultants in Dubai such as Tax Gian can minimise the tax compliance burden of the business owners. Tax Gian is a brand of Jitendra Tax Consultants (JTC). JTC and its associate Jitendra Chartered Accountants (JCA) is two-decades-old firm offering bespoke VAT consultancy services in Dubai. We are a leading tax agent in the UAE approved by the FTA. We have a qualified team who can help you meet requirements such as UAE VAT registration, VAT deregistration, VAT compliance / VAT Return, excise tax services, and services related to VAT reconsideration etc.