Invoicing and Tax regulation in UAE
Invoicing Regulation in UAE
In UAE, commercially active businesses are legally obliged to issue invoices for their provided goods or services. This should include the name, quantity and description of the goods/services supplied, the time and date of the supply, the consideration for the supply and the name, address and TRN (Tax Registration Number) of the supplier. The invoices must adhere to a certain standard layout, be sequentially numbered, and be saved for at least five years.
Real-Time Reporting / Fiscalization in UAE
Fiscalization or real-time reporting is not legally required in UAE. However, businesses must keep well-maintained books of accounts, retaining these records for at least five years. The Federal Tax Authority (FTA) may request these records at any time to ensure tax compliance.
E-Invoicing in UAE
While e-invoicing is not mandatory in UAE, it is highlyre commended for businesses. E-invoices should meet the same requirements as paper invoices. They must include details about the goods or services, the relevant tax rate, and the supplier’s TRN. Since 1 January 2021, B2G transactions must be done using e-invoicing.
VAT/GST/Tax Compliance in UAE
VAT compliance is mandatory in UAE as per the UAE Federal Law No. 8 of 2017 and set at a standard rate of 5%. Businesses must register for VAT if their taxable supplies and imports exceed AED 375,000 per annum. Zero-rated and tax-exempt supplies are specified in the regulations. Certain goods and services are subject to the reverse charge mechanism. Businesses must file VAT returns on a quarterly basis. Practical compliance involves maintaining records, issuing tax invoices, accounting for VAT on a timely basis, and filing VAT returns.