A registrant making a taxable supply must issue a full tax invoice containing specific details such as its name and Tax Registration Number, within 14 days of the date of supply, and may issue a simplified tax invoice where the consideration does not exceed AED 10,000 and the recipient is registered, while a reduction in the tax charged is corrected through a tax credit note.
Mandatory Details on a Full Tax Invoice
The Executive Regulation of the Decree-Law specifies the details a tax invoice must contain, including the phrase "Tax Invoice" clearly displayed on it, the name and address of the registrant making the supply and its Tax Registration Number, the name and address of the recipient and its Tax Registration Number if registered, a sequential invoice number, and the date of issue.
- A description of the goods or services supplied, the unit price, the quantity, the tax rate and the amount payable in dirhams.
- The value of any discount granted, the total amount payable, and the amount of tax charged in dirhams.
- A statement that the recipient must account for the tax where the supply is subject to the reverse charge mechanism.
The Simplified Tax Invoice
A registrant may issue a simplified tax invoice containing fewer details where the recipient is not registered, or where the recipient is registered and the consideration does not exceed (10,000) ten thousand dirhams, except in cases where the reverse charge mechanism applies.
Deadline for Issuing the Tax Invoice
The registrant must issue the tax invoice within (14) fourteen days from the date of supply, subject to the exceptional cases specified by the Executive Regulation, which may be subject to different periods or require immediate issuance. A registrant is also not required to issue separate tax invoices for each supply where it makes more than one supply of goods or services to the same person and those supplies are covered by a single tax invoice summary delivered to the recipient.
The Tax Credit Note
Where the output tax calculated on a supply exceeds the tax that should actually have been charged, the registrant must issue a tax credit note containing details similar to those of a tax invoice, including the phrase "Tax Credit Note", the name and address of the registrant and its Tax Registration Number, the original value of the supply, the correct value, the difference between them, and the amount of tax relating to that difference.
Illustrative Example
Illustrative example: if a retailer sells goods to an unregistered customer for a consideration not exceeding AED 10,000, it may issue a simplified tax invoice, whereas if it later discovers an error that resulted in tax being overcharged on the invoice, it must issue a tax credit note within 14 days of discovering that situation.
Legal References
- Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on Value Added Tax — Article (59) and Article (60)
- Federal Decree-Law No. (8) of 2017 on Value Added Tax — Article (67)
For questions about your specific situation, you can ask the UAE Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.