Tax Invoice

What a Tax invoice is?

Since 2018, Value Added Tax (VAT) was introduced into the UAE's accounting system. All VAT registered companies are required to issue Tax invoices for the taxable sales. This is required in order to file a proper VAT Return report on a quarterly basis and avoid unexpected fines from the FTA.

Tax invoice is a document issued by the VAT registered company for each taxable supply of goods/services.

When the Сompany shall issue the Tax invoice?

It is advised to issue the Tax invoice only after receipt of the payment since the VAT Return report is filed as per the Tax invoices dates.

How the Tax Invoice must be drawn up?

The Tax invoice must include the following:

• The document’s name must be “Tax Invoice”

• Tax invoice serial number and date

• Company’s logo, name, address and (Tax Registration Number) TRN number

• Customer’s company name, address and TRN number

• Description of goods/services

• The unit cost, the total number of units, the applicable VAT rate, and the total amount due in AED for each item of goods/services

• Total amount payable in AED

• Total amount of payable tax in AED

What document shall a company issue in order to receive a payment?

The company shall issue an Estimate, Quotation or Proforma invoice in order to receive the payment. The document must contain the description and cost of goods/services along with the company’s name, address and bank details.

Delivery note

is another accounting document that proves the delivery of goods. For the services the company might issue a Job completion report, if required.

Statement of account

is a document that shows all transactions that took place between the company and its Customers or Suppliers for a certain period of time. This document provides a comprehensive summary of the financial transactions, such as invoices, payments, credits, and debits, associated with a specific account.