VAT is all set to be implemented in UAE from Jan 2018. Article 54 to Article 56 of UAE VAT Law describes the conditions and eligibility of claiming UAE VAT Recoverable Input Tax.
Article (54) – UAE VAT Recoverable Input Tax
Source: www.mof.gov.ae
In simple terms, a registered person is liable to recover input tax paid on the purchase of goods and services intended for the furtherance of business except for capital goods.
If there is no provision for collection of Input of VAT paid, increase in prices of good and services will be big. Thus, making the goods and services more expensive.
Case Study Supply Of Goods Without UAE VAT Recoverable Input Tax Credit
Let us take an example of a supply chain of the textile industry.
Supply from Manufacturer to Distributor
Sale Price – AED 100 , 5% VAT – AED 5, Total Price – AED 105
Supply from Distributor to Retailer
Sale Price – AED 115 , 5% VAT – AED 5.75, Total Price – AED 120.75
Supply from Retailer to Consumer
Sale Price – AED 135 , 5% VAT – AED 6.75, Total Price – AED 141.75
Hence, the price payable by the consumer includes VAT of AED 17.50 (5+5.75+6.75).
Case Study Supply Of Goods With UAE VAT Recoverable Input Tax Credit
Let us take an example of a supply chain of the textile industry.
Supply from Manufacturer to Distributor
Sale Price – AED 100 , 5% VAT – AED 5, Total Price – AED 105
The manufacturer gets the credit of VAT for raw materials used if he has paid VAT on it. In this case, we consider not VAT Paid.
Supply from Distributor to Retailer
Sale Price – AED 110 , 5% VAT – AED 5.50.
The Distributor gets Input Credit of VAT amount AED 5 paid to Manufacturer. So VAT payable is 5.50 – 5.00 = 0.5.
Hence, he can now adjust the sale price forwards the benefit of VAT Inputs to his supply chain.
Total Price – AED 115.50
Supply from Retailer to Consumer
Sale Price – AED 125 , 5% VAT – AED 6..25,
The Retailer gets Input Credit of VAT amount AED 5.50 paid to Distributor. So VAT payable is 6.25 – 5.50 = 0.75.
Total Price – AED 131.75
Hence, the price payable by the consumer includes VAT of AED 6.25 (5+0.50+0.75).
This is the benefit of UAE VAT recoverable Input.
Furthermore, every person in the supply chain is collecting the same amount of profit as earlier. This creates a win-win situation for all.
As we can see that the price difference to be paid by the consumer is less in UAE VAT Recoverable Input Tax system.
Price Without Input – Price With Input
141.75 – 131.75 = AED 10.
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If you have any queries please share in the comment section below. I will be more than happy to assist you.
my company is renting Residential flats & commercial Units.
Maintenance expenses for Commercial Units are recoverable and for Residential flats are irrecoverable.
How about other expenses ?
As per your question you are a service provider for your clients. You charge VAT on your services. The expenses related to the property are claimable for commercial units by the owner. For residential units, they are exempt and thus no input claimable.
dear plz guide me, once we pay VAT in electricity bills then why we have to pay the VAT to gove again.
Hi,
I have some doubts related to input tax for commercial units. If a individual person owns a property and rented for commercial use, either he can claim input tax or not? (For examples: VAT paid for electricity and internet services or etc).
As per the ruling, if it is a commercial unit, the input is recoverable.
Dear Mr Sir,
With reference to UAE VAT Plz advise us can we claim of input vat on admin expenses such as office rent, phone bill, electric & water bill, office stationary, fuel and salik, staff insuranse
Any expense for your company that you make with VAT paid on it and have received an invoice in the name of your company can be claimed as input. Only Entertainment expense is not claimable.
Thanks for support, plz clear the following can we input claim
1) as bank charges such as switch fees & collection fees inc vat only show in statement no invoice provide by bank
2) as fuel bill recvd by name of vehicle number only (company registered vehicle)
3) some e-payment where we received only receipt of payment no invoice copy provided by e service
1. Bank Charges Input Vat is claimable if in the name of the company otherwise not.
2. If the receipt contains the company vehicle number then claimable. Again if the vehicle is used for other than business purpose then it might not be claimable. Emarat, ADNOC issue prepaid cards for companies. Those receipts have company names on it and VAt can be claimable.
3. The receipt must contain company name then only claimable.
Now banks started providing Tax Invoice for bank charges, if not received you can ask your bank to provide the same.
Vat on prepaid expenses such as yearly rent, insurance premium are claimable, if yes then advise me how to claim period wise or full,
The rule for input claim is simple. If the expenses used for a taxable supply then they are claimable. Not sure about Insurance Premiums but Rent is claimable. The month in which the amount of rent is paid, VAT amount of it will be reflected in respective month. To simplify, If rent paid in 3 cheques then the first cheque will be current and other will be post-dated. The first cheque will be reported in which it is paid and the rest in later months when they are paid.
We paid already the Rent VAT in cash & I received tax invoice for the full amount. Please advise me if I can claim it full or still period wise as per cheque date.
Period-wise as per cheque date. VAT is claimable on an actual basis. Just put the reference of invoice in each month’s entry against your client.
Hi, Can a company claim vat on its grocery purchases
If the invoice is in the name of the company. Again if the groceries are for employee entertainment then they are not claimable.
If i fail to take input credit in the month of which invoice is dated can I claim it in the subsequent month for example Jan claim can I make it in Feb return?
Yes you can.
Can we claim VAT for July invoice in the month of Nov? I have an invoice from July and we have not received full amount in July, Hence there was a credit. Now the payment is done so how to deal with it? Please guide.
yes
Could you please send the reference from VAT for Input tax claiming in later period and maximum time period to claim input vat
YOur answer on page 18 of the pdf guide provided by FTA. Please click on the link below:
https://www.tax.gov.ae/pdf/VAT-Returns-User-Guide_English_1.pdf
Hi
When we can claim ITC ? is there any time limit within which we have t claim ITC an under which Article?
WIll look into it and get back to you.
Sir,
Is there any time period for vat input credit?
You can claim in preceding tax return as written in regulations. But after that I have no idea, you need to clarify with FTA.
We pay Salary and related expenses of our Principal employees in Dubai, and the same is being paid/reimbursed by the Principal office registered in Hong Kong.
How is Vat to be treated in this case.
According to my understanding, you are providing service to manage your HK client’s business in UAE. In this case, you issue the invoice to HK client for the services. Salaries, in general, are out of the scope of the VAT. Thus, you can receive money from HK on behalf of your services that you provide.
sir
We are providing services to our corporate office in Japan and we issue invoice to Japan , should we charge vat
It is export of services. Out of scope of the VAT. No, you don’t charge VAT.
Here, Export of services is not out of scope.
According to place of supply rules, in this question, place of supply is in the UAE hence VAT obligations will be applied.
However, this services come under export and hence Zero rated invoice will be issued.
Ref:-Article 29 & 30 of the VAT Law.
Thank you, Amir, for correcting me. Will soon rectify the article in accordance with the law.
hi, can i recover input vat if the bills were not yet paid?
Purchase of the same month against the sale of the same month shall be reported. If yet bills not paid doesn’t affect your vat return. In case you return goods from that bill you will have to reverse the return goods vat amount with proper documentation.
Dear Sir,
We as agents, pay salary and other related expenses on behalf of our Principal registered in HK. This cost is being reimbursement by the Principal back to us.
What are the VAT implication for this reimbursement.
According to my understanding, you are providing service to manage your HK client’s business in UAE. In this case, you issue the invoice to HK client for the services. Salaries, in general, are out of the scope of the VAT. Thus, you can receive money from HK on behalf of your services that you provide.
for international transportation if we ship our customer goods to outside the state and there is no clearing agent to act on behalf of our customer, and we ship goods by other company name so there will be no commercial and official evidence on our customer name can we still charge our customer for tax on 0 rate.
Cannot understand your query dear. Can you please elaborate? I cannot get your point. Your company located in UAE. You purchase overseas. Sell the same to other buyers overseas without customs clearance then as no sale made inside UAE your sales is out of the scope of the VAT. But if the scenario is different please provide complete details.
I have many queries on VAT RECOVERY…for e.g: water bottles bought for the company with vat paid, Point on Sale machine were charges are paid vat, is that vat is recoverable or not.. company veichle petrol VAT RECOVERABLE OR NOT
I have many queries on VAT RECOVERY…for e.g: water bottles bought for the company with vat paid, Point on Sale machine were charges are paid vat, is that vat is recoverable or not.. company veichle petrol VAT RECOVERABLE OR NOT
Petrol only recoverable if the car is registered in the company name and the bill consists of company TRN. Another solution to this is the issuing a petrol card in the name of the company. Where you get a receipt in the name of the company.
Sale machine receipt not acceptable.
How about water bottles purchased for the office consumption that he has referred ?
Rule of input is quite simple. Anything purchased for a taxable supply can be claimed as input. According to the law, TRN and company name are mandatory for input claim. No simplified invoice without trn and company name cannot be acceptable. Further clarification awaited from FTA.
Hi Fahim,
So we cannot claim any VAT from our Petrol Expenses even if the Car Plate no. is showing on the receipt? Sales Machine receipt is not acceptable so the only choice is to have a petrol card under the Company Name?
Dear Steven, According to the ruling of Input claim, the company name and TRN are mandatory and thus it can be said that sales machine receipt is not acceptable. A better solution which I could think of is the prepaid petrol card. Because when you will get the petrol card they will issue an invoice/receipt with company name and TRN along with VAT details. Most VAT experts have the same opinion. You can consult FTA or local tax consultants for detailed clarification.
Thank you so much Sir for answering our queries.
More Power and God bless you more.
sir
we use to raise invoice to our client on actual expenses incurred with 10% margin amount , should we charge VAT
our client says the expenses are inclusive of VAT and you cannot charge additional VAT.
Depends upon your service contract. You seem to be a service provider to your client. No Additional VAT can be claimed on vat paid bills. But you can charge an administration fee to manage the work as a whole and claim VAT on that. The VAT that you have paid can be claimed as input.
we build residential villas and commercial buildings. as per my knowledge the residential building and villa construction is exempt from VAT. can we claim the refund of vat on the expenses which have been incurred on the construction of residential building.
please advice
Yes, input can be claimed.
THANKS
should we charge 0% Tax Invoice for the actual expenses Incurred and 5% on administration charges and should we consider the same as our Sales
And Some of the bills are with out vat, should we charge vat for this bills
we transport goods from state to other countries so in this case first we transport goods from customer’s place to jebel ali port and than transport by vessels to that other country destination.
is the first transport from customer place to jebel ali port is also zero rated when goods are transported (export) to their final destination.
There are 3 situations in this type of transaction:
1. Mainland company billing to Your company registered in the mainland. VAT Applicable
2. Mainland company billing to Your company registered in Designated Zone. VAT applicable
3. Mainland company billing to Foreign Company. VAT Not Applicable
See which of the option are you in.
Transportation is Zero Rated, right then how the Vat charged?
I think you need to read the law very carefully dear. Public transportation is zero-rated. All other means of private human, as well as goods transportation, fall under the standard 5% rate.
Hi Mr. Fashim!
how about the simplified tax invoice on which our company name is not mentioned, can we claim input tax? lets say it is for business use but the invoice is not in our company name because it is a simplified tax invoice.
No without TRN it is not claimable according to the law
Article (59)
A simplified Tax Invoice shall contain all of the following particulars:
a. The words “Tax Invoice” clearly displayed on the invoice.
b. The name, address, and Tax Registration Number of the Registrant making the supply.
c. The date of issuing the Tax Invoice.
d. A description of the Goods or Services supplied.
e. The total Consideration and the Tax amount charged.
Simplified tax can be issued under the following situations:
a)Where the Recipient of Goods or Recipient of Services is not a Registrant.
b. Where the Recipient of Goods or Recipient of Services is a Registrant and the Consideration for the supply does not exceed AED 10,000
So I understand if the value is less than 10K the business is allowed to issue to simplified tax invoice, wherein only supplier TRN and address is mandatory, customer TRN and address is not mandatory, therefore if it is proper simplified tax invoice, the customer can claim the input vat
Kindly advise if you have a different view
Dear Shafeeque, My understanding of the matter is this that simplified invoice is allowed for those whose usual daily basis transactions are less than AED 10,000. For example supermarkets, groceries, retail outlets etc. But where your routine sale is above that you cannot use both types of invoices.
The claim of input is possible on such invoice except for petrol bills and entertainment expenses.
hello sir,
we have given our company warehouse to lease for two years on November 2017 on wards .how i can collect VAT from my client.( can i collect full VAT from 2018 on wards to 2019 or only 2018 VAT).
You can collect both. but advisable only 2018 VAT from the accounting point of view.
Hi Sir,
We have a car registered on company name their fuel costs, parking fee and other costs are applicable for input vat recovery or not?
And the input tax can be claimed over miscellaneous expenses or not?
Thank You
Only bills for which VAT is paid can be claimed as input. The bill should be in the name of the company with company TRN on it and the vehicle number. If it qualifies the above you can claim. As a matter of fact, fuel bills don’t have company TRN. In this case, you can get a prepaid petrol card from fuel companies and they will provide you with VAT bill in your company name with vehicle number and your company TRN.
1. We are into Trading Business (LLC company
registered in Dubai) and all of our business is overseas. we purchase overseas and Sell the same to other buyers overseas without customs clearance in UAE. but, all of our receipt and payment transaction is routed through UAE banks. What will be the consideration while accounting bills in to book?
2. Owner of the office premises and the company are same. Ejari and contract are made with a reasonable amount. What will be the VAT related treatment? Note that no physical movement (Payment of rent by cheque or cash) of the transaction took place.
1. Export is out of the scope of the VAT. Whereas in your case you don’t clear customs while importing. VAT is not applicable to these transactions.
2. As owner uses his premises it will his capital goods used for business. The owner can claim on his return any inputs on his personal VAT return.
Company but mobile phones for company purpose and giving to client as a gift. The invoices is our company name. Can I claim Input VAT.
Yes, it can be claimed if the invoice is in the company name.
We import goods from China. We import to Free zone and also to Main Land Can I deduct the Input VAT which were paid through Customs Authority as Reverse Charge Mechanism.
Dear Shihab,
it depends on where the goods are supplied. If you supply to directly from port to other implementing state then not claimable. If exporting the goods further to other than VAT implementing countries then it is claimable.
can we claim vat amount of telephone, Fax & internet expenses?
If these expenses are paid for office and you have paid vat on them then you can claim vat on them.
We are purchasing pantry, fuel etc without specifically billed under company account? Is our company eligible to Claim this kind of input VAT?
No TRN of the company on the bill, input cannot be claimed.
As per our knowledge, restaurant bills are inclusive of tax. Some restaurants did not specify the tax amount in the invoice. They write total amount only. So, can we reclaim the tax paid amount here?
There are chances that those hotels not mentioning tax might not be registered and below the threshold limit. If they are registered for VAT and have a TRN Number you can comply them to issue a tax invoice or launch a complaint to FTA.
Sir
1, I completed 80% of work in Last year 2017 , issue invoice and also payment received , remain portion 20% will complete 2018 , is it chargeable VAT?
2, One of my Purchase invoice does not mention my companies TRN , Can i claim input tax ?
1. Yes, on 20% VAT will be applicable.
2. No TRN no claim of input.
Sir,
1,When i upload purchase invoice details to VAT Site , what type break up details will need for upload data?
2, if i have purchase from outside UAE, can i claim input tax ?,
if i can claim input which month shoul i claim input tax?
1. Question not able to understand. To understand the UAE VAT Return click on the link below:
https://exceldatapro.com/uae-vat-return-format/
2. If Input tax paid through the reverse charge on import and sold in UAE it can be claimed. If sold outside UAE to implementing state then not claimable.
can we claim vat Amount inusrance on Comapny Vehicle
If the invoice from the insurance company is in the name of your company and has company TRN.
hello
i have a query
i am in second hand business in dubai
so if i buy used spare parts from registered business i have to pay input tax on profit margin basis
so my question is that can i recover that input tax ??
Input not claimable.
my company is construction we Purcahse Diesel for Generator can we calim vat amount.
If diesel the tax invoice issued consists of company name and company TRN.
Sir,
we have export invoice so i want to pay customs and VAT when shipment time .(Ex Total Value of Product 306700 , customs duty will come15335( 5% on 306700 )And also 5% VAT will come on (306700*5%)*5%=16101 )
Can i claim VAT and Customs duty?
When should i take claim?
Will i get statement about VAT And custom duty paid from any govt Site?
sir
we are services provider to our client as operation and maintenance monthly fixed charges apart from that we use to buy some consumables/material items and we use to claim this amount from client with 10% admin fees , my question is should we charge vat on whole amount of expenses made or only on 10% administration fees
if only on administration fees vat should be charged then how to show the actual expenses amount in invoice with 0% vat then what will be the sales value for whole invoice
Is tax paid on Medical fitness typing / emirates id typing for employees can be claim as input tax
Any expenses on which VAT is paid and are related to business supply are claimable. In your case, according to my knowledge, the expenses incurred are to acquire the workforce for a smooth running of the business and will be by any means used for taxable supply. Thus you can claim these expenses. Please look for the list of expenses published by FTA for claimable expenses.
WE have paid VAT on rent of our showroom
can we claim the input tax credit of that
Any expenses on which VAT is paid and are related to business supply are claimable. In your case, according to my knowledge, the expenses incurred are to acquire office for a smooth running of the business and will be by any means used for taxable supply. Thus you can claim these expenses. Please look for the list of expenses published by FTA for claimable expenses on FTA Website.
we have a labor Camp. and we pay the electricity bill for that..can we recover Input VAT on payment of electricity bill of Labor Camp?
The labor is used for preparing taxable supply. Thus it can be claimed.
CAN WE INPUT CREDIT ON SERVICES LIKE COMPANY ELECTRICITY BILLS. WETHER WE DIDN’T PAID THE BILLS CAN WE CONSIDER THAT BILL IN OUR TAX REPORT.
According to the best of my knowledge, Sales and purchase of the respective month are to be reported in which the transaction took place. Payment is irrespective. But if any changes of goods or services are there it should be simultaneously reversed. For further clarification, you can contact FTA approved Tax Agent.
CAN WE TAKE INPUT CREDIT ON SERVICES LIKE COMPANY ELECTRICITY BILLS. WETHER WE DIDN’T PAID THE BILLS CAN WE CONSIDER THAT BILL IN OUR TAX REPORT ASSESMENT.
According to the best of my knowledge, Sales and purchase of the respective month are to be reported in which the transaction took place. Payment is irrespective. But if any changes of goods or services are there it should be simultaneously reversed. For further clarification, you can contact FTA approved Tax Agent.
Hello
1) The invoice on my petrol slip contains my Car no but not my Company name or trn…can i claim the vat?
2) my purchases of goods for business contain my company name but not my companys trn no…. the sellers trn is there on it…will i be able to claim my vat?
1. Currently, it is Not claimable. Still, further clarification from FTA is awaited. You can raise this query directly to FTA.
2. As per the law, it requires name and TRN both. If the company can issue a new bill mentioning your TRN then you can claim input.
Dear Respected Sir,
Can you please let me know if our customer is paying directly to suppler for our material then on which category this expenses is treated has he paid vat on it. But it was our company’s expense.
Thanks in Advance for your reply to all above quires.
If you customer pays directly to your supplier then how do you receive your payment? Whom do you issue the invoice and of what amount? If you are an agent and you don’t bill there is not vat applicability in sales or purchase transaction. You charge 5 % vat on the services provided by you.
WE HAD VISA RENEWAL BILL WITH VAT CAN WE RECOVERABLE?
AND ALSO WE HAD BILL WITHOUT OUR COMPANY NAME AND TRN NUMBER CAN WE RECOVERABLE? WE HAD SHOE BILL WITH SHOE COMPANY NAME AND TRN NUMBER WITHOUT OURS CAN WE RECOVERABLE?
As per the law, it requires name and TRN both. If the company can issue a new bill mentioning your TRN then you can claim input.
Dear Sir,
Good Morning!
I have one purchase bill from Reg VAT Dealer. Bill have mentioned my company name but not mentioned my TRN .
Can i cliam Input Tax?
Dear Sir
I have one Purchase Bill with my business name (From VAT Regd Dealer) but they did not mention my TRN Number .
Can I claim Input Tax Credit?
As per the law, it requires name and TRN both. If the company can issue a new bill mentioning your TRN then you can claim input.
Dear Sir,
We are in to legal service and we issue our invoice to outside GCC client for the service we performed in UAE as well as in outside GCC.
For Eg: We issue an invoice to our client in USA for their trademark registration in UAE. Does it come under 5% VAT. As per me it should be Zero rated. Accordingly we issue an invoice to overseas client for the service we performed out side GCC, say UK or USA. Please advise whether it comes under zero rated or exempted service.
Also clarify, if we issue an invoice to our client in UAE for the trademark registration in turkey. Does it come under 5% VAT or zero rated.
Please also advise on the reclaimable of INPUT VAT paid on expenses such as office rent, electricity, telephone bills, bank charges, employees insurance, VISA expenses etc.
I highly appreciate your advise and supports on this matter and look forward to hearing from you soon.
Regards,
Rayyanu
In case No. 1 the place of supply is UAE and hence vat is applicable.
Case 2: Client is UAE but place of supply in Turkey, UK or USA. VAT not applicable. Still doubtful. I advise you to check with FTA approved tax agent. I will also look for answers and get back to you.
ANy expenses made for taxable supply are claimable subject to proper documentation. Company name and TRN must be mentioned.
Dear Sir,
Thank you for your kind response. Please clarify whether its zero rated or 5% VAT for case 1 as the clients are outside GCC. Can we treated as export of services?.
Also advise, whether below mentioned details are correct in terms of place of supply?.
Location of Client Location of Service VAT Rate
Non-GCC state UAE or Saudi Arabia 0%
UAE or Saudi Arabia UAE or Saudi Arabia 5%
Bahrain, Kuwait, Oman or Qatar UAE 0%
UAE or Saudi Arabia Not in UAE or Saudi 0%
Best Regards,
Rayyanu J
My Co.is in Safe zone & exporting to Pakistan .My doubt is as it is out of scope, can I recover input vat on these suplies ?
If you are registered entity and purchase goods by paying vat then you can claim the input.
Dear Sir
I have one VAT Purchase bill, it have mention my business name but did not mention my TRN
Can i Claim Input Tax?
As per the law, it requires name and TRN both. If the company can issue a new bill mentioning your TRN then you can claim input.
1) In Vat Return, What amount should i enter in total expenses (means i will include all purchase or only claimable purchase amount).?
2) In Tax Bill both company name and TRN is Must , or company name only is ok?
1) Only Claimable
2) Both are necessary according to the law.
Thanks a lot Mr. Fahim.
In construction , the Project was finished last year and invoice also made.
If we received payment this year, we would collect vat or no need?.
Vat Not Applicable as supply and invoice both are done before Jan 2018.
And One More query ,
Our first Tax period from 1st – 30th April, for this vat return can we claim the tax which is we paid from jan -mar? or only from april we need to claim.
Thank you sir for your kind information. 🙂
You are welcome.
And One More query ,
Our first Tax period from 1st – 30th April, for this vat return can we claim the tax which is we paid from jan -mar? or only from april.
Good morning!
Just have some queries.
We are a service company.
1) We have render service for client outside UAE in Europe and have external provider for work in KSA. We add additional margin for the KSA service billed to Europe from our Company here in UAE. KSA billed us for their services having NO TRN, is this subject for Reverse Charge?
2) Unpaid bill dated Jan 2018 for over 45 days from other service provider with Tax Invoice having our company name & TRN and included in our Jan- Mar return as VAT Input, is this acceptable?
What if Still Unpaid and NOT included in Jan- Mar VAT return, can this be included in our next VAT Return period as Input Tax?
Thank you so much for your time answering my query.
Best regards
Dear Mr.Fahim,
We are in the Hospital industry and do charge our customer / patients zero rated VAT invoice (output vat is 0%) but in most of our purchases are zero rated and few of the supplier charging us at standard rate of 5% for the material we use it for treatment plus all other admin expenses like Rent , Telephone, water, maintenance etc are @ standard rate which comes under our Input credit.
Now my doubt is can I claim the full input credit ? or we are eligible to claim against the VAT Charged my customers . it means I will observe the VAT amount as my cost / admin cost. i.e my vat out put is AED 75 but my input credit from the purchases is 6500 )
1. We paid Advance rent for 6 months as per the Rent contract for the period before 31.12.2018. As per VAT law earlier of payment/invoice/completion of service will be the time of supply, which in our case will be before 31.12.2018 as advance rent. Are we liable to pay VAT on the rent period falling after 1.1.2018?
2. We have a restaurant business for which we buy vegetables and other ingredients from Carrefour which always issue a simplified Tax invoice that doesnt contain the name of our company and TRN. Can we claim input credit on such purchases as this is direct expenditure for the restaurant business.
Dear Sir
i am in scrap business, we are purchasing scrape from consumer.
next we are selling to recycling company & they are paying tax to us on total purchase whatever they got from us.i want to make sure we are only responsible to pay that tax to Gov as output.
which excel sheet we will use to submit detail of our sales.
thank you
There is no excel sheet to submit your sales. You need to fill online vat return.
Dear sir,
1) If we missed to file input tax in one tax period, is it possible to file and recover the same in next tax period ?
2) How to collect VAT on advances.
Please let us know.
1. Yes, you can put them in next tax period.
2. Proportionate VAT to be charged. For example, if the advance is AED 10000 and the total invoice value is AED 25000 then you will charge VAT on AED 10000 only. And when the final payment released you will collect the vat on remaining AED 15000. Be careful to show the calculation of advance amount and vat on the final invoice.
Hi,
Can i claim VAT if inovices issued to me from my supplier doesn’t have my company name or TRN? but
Not Claimable. TRN and Name are mandatory.
after filling vat return, if my input vat is higher than output vat, how can i get paid? Do i need to scan Submit All invoices or how it works?
thanks in advance
Apply for a refund of your excess input tax.
Hi, thanks for your reply,
will they ask me to submit all my invoices? how they know we are supplying correct information?
FTA has a system for checking it and if found doing wrong they can impose fine on such companies.
Dear Sir,
We are importing goods from china and used in UAE. In our account (TAX website) VAT for those goods already showing. Is there any chance to recover the VAT amount.
You can apply for a refund of your tax. But according to my knowledge, if the goods are sold in UAE the output VAT will be always higher than the input VAT. Please check. Your scenario is only possible if you are unregistered and sell without VAT due to sale less than AED 375000.
Sir our Invoices issued to Customers are not in sequence. we are using same numbers for quotations and invoices, for example. we are making quotations for customer, QTN no is 1001 and QTN 1002.
QTN 1 was not approved by customer and but QTn 2 was approved and now we will convert it into invoice, which will be 1002.
My question is when i do tax return, if FTA will check, will it be problem for us as 1001 is missing.
You must maintain sequence. If by any chance audit from FTA is given, you might be in trouble. Maintain sequence. The solution for what doe till yet is that VOID or keep canceled invoices fro the same numbers which you have not issued.
dear sir
Can we claim vat on bills for renovating our office. we have done full painting of office, changed flooring also.
No, Input VAT is claimable if the expenses involve taxable supply. For clarification on this matter please raise your query on FTA official website.
Dear Sir,
Thanks for your valuable answers.
1) We are using one format of invoices from January and now we are planning to change the format of Invoices (Only format not numbering). Please let me know is it acceptable.
2) Sometimes we are getting work confirmation through emails, and there will be no LPO’s is it acceptable in the feature.
1. No issues in changing invoice format. Series should be maintained.
2. LPO is for your convenience. Nothing to do with FTA. FTA is considered only with the amount of VAT collected by you and deposited to them.
Dear Sir,
kindly guide me on below points:-
1. Petrol exp. for company car – can claim vat ?
2. auto spare parts purchase for maintenance of labour van – can claim vat ?
I will wait for your reply..
regards,
Vinod
1. If you have car name and trn printed on bills and if the car is only used for office use. If it is used for personal use then the proportionate amount can be claimed. But Again Name and TRN mandatory.
2. Claimable
Hi Mr Fahim,
We are in online trading of goods business (small scale) and have individual customers.
I have few questions:
1) We are importing goods out of UAE (Europe), do we need to pay VAT on invoice value at the time of filing return and claim back (reverse charge mechanism)?
2) We are also importing stock on consignment from Dubai free zones and outside of UAE (Europe) so custom documents are prepared, do we need to pay VAT on invoice value of consignment stock as per custom document? we send back unsold stock after few months.Supplier send us the invoice of sold stock and we pay.
3) We pay online for ads/monthly subscription mostly outside of UAE, do we need to pay VAT on these payments and claim back (reverse charge mechanism)?
4) We paid to supplier outside of UAE for services (blog writing), do we need to pay VAT on these payments and claim back (reverse charge mechanism), supplied didn’t charged VAT in the invoice.
Will really appreciate your answers.
Regards,
Your queries noted. Will soon be replied.
Thanks alot.
VAT return is due on May 28, 2018.I will appreciate your earliest response.
Thanks & Regards,
Hi, response in respect to which query are you waiting for?
Dear Sir,
Wishing you Ramadan Kareem.
1) We got one LPO in April and submitted Tax invoice in April for advance payment. Our Tax period is Jan-Apr 2018. Still we didn’t receive the advance and work not done yet. How to treat this should we return this amount in our current VAT returns, or next tax period. Kindly let me know.
2) We imported some material from china and used in UAE. In our tax account VAT amount relating to this import is showing. Should we pay this amount or should we show this under reverse charge mechanism.
Kindly suggest. Looking forward for your keen reply.
1. report on next tax return.
2. Reverse charge amount to be paid by the company. Later on, it can be recovered under input.
Thanks for your valuable reply,
Recover will be in the same tax return or next return sir.
Looking forward.
Same.
Dear Mr.Fahim!
I have one question ,Is it necessary to use Accounting Tax software or any ERP software for VAT return procedure ? Actually we have all data in excel sheets. I think it is ok we don not need to have ERP software because we need to submit all figures on FTA website.
and one more question that do we need to attach invoices to FTA portal while VAT returning or just need to pur exact figures?
I look forward to hearing from you.
Yes, you are right. for the filing of VAT Return, it might not be necessary. VAT return contains only figures. THus no invoices or invoice data. It should be kept in mind that your accounting data should match vat return data. If not it is subject to penalties.
But it is mandatory to maintain records of the transaction of sales, purchase, for 5 years by FTA. In this scenario, It is advisable to take an accounting software.
Please read Article 2, 3 and 4 of Executive Regulation for UAE VAT Law.
Thank you so much for your kind reply JazakAllah sir.
If there is no transaction in a tax period so we need to file nil VAT return right??
should i put “0.00” in all boxes ?
yes.
sir
can we claim Vatinput on workmen compensation insusurance
elaborate your query? What is workmen compensation insurance? general insurance, medical insurance or anything else?
Dear Sir,
Please clarify as soon possible with your valuable answers.
1) Our VAT return period is (Jan’18 – Apr’18). We got one purchase order in March we just submitted invoice for advance payment. Still we didn’t start the work also not received advance payment. How to treat this should we include this in total sales amount while filing, If yes how what about VAT on advance which we didn’t receive yet.
Ex: Two purchase orders AED 10,000 and AED 50,000. In this two order we completed AED 10,000 work and received amount.
For AED 50,000 we just submitted invoice for advance payment. Work not yet started and advance payment also not received.
Looking forward for your keen reply.
1. Will not be reported in this return.
can we claim input vat on prepaid exp, such as year rent once a time, yearly insurance, do we claim it like normal exp or claim partly period wise
The rule for input claim is simple. If the expenses used for a taxable supply then they are claimable. Not sure about Insurance Premiums but Rent is claimable. The month in which the amount of rent is paid, VAT amount of it will be reflected in respective month. To simplify, If rent paid in 3 cheques then the first cheque will be current and other will be post-dated. The first cheque will be reported in which it is paid and the rest in later months when they are paid.
Little confusion such as we received yearly Annual maintainance invoice of 12000, and we gave 3 cheque of 4000 (one current two PDC), so in this case do we have to booked vat according to payment date wise and full invoice will be not booked( invoice will use only for reference )
Reporting will be according to the invoice. If the invoice is full then the full amount and if the invoice is part the part amount. In case of any return of money or nonpayment of the cheque, the adjustment needs to be made in VAT return.
Dear Sir,
We have one LPO value of AED 100,000. Terms of payment 60% advance and 40 on completion. The work will complete within this tax period. Can we collect VAT on 60% advance. Please advice. Also while preparing invoice is it need to mention full LPO value ?
Kindly, please advice.
Not necessary to mention full value. Yes, you need to collect the VAT on 60% amount.
Hi
1.Our company import Flavour from India and sell part of it with some other additives to KSA (to a vat registered customer) and Other part of world( non vat countries). If we do reverse charge mechanism, can we claim the entire input vat on flavour import in the VAT return?.
2. Can we claim input VAT on medical Insurance premium paid for employees and their dependents?. We have Tax invoice in our company name?
1. No, If it is partly used for taxable supply you have to report it proportionately.
2. Yes.
Dear Mr Fahim Lashkaria
our company is a small interior design, my boss directly purchase material to store and the purchase invoice is only mentioned in cash in hand writing
please advise if we can claim the vat
thanks
Dennis
In your case, ITC is not claimable. The ruling is that the invoice must contain your company name and your TRN number on the invoice. It doesn’t matter the bill is handwritten or computer generated.
hi,
sir if we deposit cash borrow from someone or own personal cash into business bank account, how do we treat this transaction. if Audit is performed by FTA how do we show them that it is our own money not received from any customers. do we need to pay tax on it aswell what is the procedure? kindly guide me. thanks in advance
Entries of borrowing in accounting will be done as loan and money from the owner will be reported as capital. During an audit by FTA, they will consider the amounts of the VAT and no other bank transaction. If you do proper accounting then there can be no issue in the audit.
1. Whether the Franchisee fees collected from a UAE VAT registered customer is comes under standard rate of 5%?
yes, the standard rate 5% applicable to franchises fees
Dear Sir.
we have received January Tax invoice in June and Tax invoice date is mentioned 1-1-2018. can we claim the Input VAT in 2nd quarter. if we claim those input credit where it should be mentioned (Box 9: Standard rated expenses or “Adjustment (AED)” in vat form 201, Your help is highly appreciated.
Thank U
Abdul S
Dear Sir.
we have received January Tax invoice in June and Tax invoice date is mentioned 1-1-2018. can we claim the Input VAT in 2nd quarter. if we claim those input credit where it should be mentioned (Box 9: Standard rated expenses or “Adjustment (AED)” in vat form 201, Your help is highly appreciated.
Thank U
Abdul S
You need to claim this input in Adjustment section
one more question sir,
we have lpo for 2017 and we have made invoice for 2018 including vat they received and stamp for 2018. but they dont want to pay the vat and they want the invoice without vat. the problem is they stamp and received in 2018. can i put in 2017 for the invoice or shall i pay the vat in 2018
Dear Dennis,
VAT applicability is on the work completed date and not the LPO date.
The answer to your question is simple. IF the supply is made or provided service in 2017 before implementation of the VAT, then VAt is not applicable. But if the supply is made or provided service in 2018 after implementation of the VAT then AT is applicable and your client has to pay. If in case your client doesn’t pay the VAT amount, you will have to pay from your pocket.
Dear Sir,
I just have a question regarding Damaged Goods from the Freezone that were sold to Dubai Mainland, how should we account for the VAT?
Thanks,
Steven
Yes VAT to be collected.
Thank you so much Sir.
Hi sir
In the purchase invoice only our name is mentioned but our VAT number is not mentioned. The supplier’s VAT number is there. Can we claim input VAT on these purchases? or we need to get invoices with both our name and VAT number?
According to the rule, TRN and the company name both are mandatory. You might claim in input as you have already paid Vat. But to avoid any discrepancies with FTA it is better to get a new invoice from your supplier mentioning the Company name and TRN.
Hi Sir Fahim,
I just have 2 questions as follow:
1. Should we make an Account like VAT Payable or VAT Receivable Account to close VAT on Sales (Output) and VAT on Purchase (Input)?
2. If yes, should we close it every end of tax period or after tax year?
Thanks,
Steven
1. Yes, it is advisable and better to make Ledgers for VAT input and VAT output.
2. My suggestion would be closing it at the end of the tax year as there could be carried forward of inputs for the whole year.
Hello Sir,
Is it possible to claim the Input VAT the employee is paying for the fuel expenses, even though the car is not registered under the company but is in the name of the employee and solely using for company purposes? (fuel expenses are shown under company expenses and have its own separate account in the chart of account
Also, what If there was no account maintained for the fuel expenses and we have been giving AED 1,000 to the employee along with his salary (have mentioned AED 1000 will be given for company transportation exp.), can we claim the VAT up to AED 1,000 every month for the bill she produces.
I was told it is not mandatory to have the company name and TRN in the invoice for bills less than a certain amount (I guess AED10,000)
Would greatly appreciate if you could give me a solution for this.
Thank you
1. According to the rule of input claim, it is necessary to have TRN and company name on bills.
2. If the car is in the name of the employee, the car will be surely used for personal use also. THus, only the proportionate amount is claimable. But again the bill should be in the name of the company and must have TRN.
3. You cannot claim anything right away as input unless you have proof of VAT Paid as input. Thus you cannot pay AED 1000 and claim input as travel allowance or whatever allowance.
A feasible solution here could be getting a prepaid petrocard from fuel companies in the name of your company which can be used by your employees. The fuel companies will issue receipt or invoice with your company name and TRN which will be according to the rule and claimable as input.
Dear Sir,
We have one PO, 60% advance and 40% on completion. While preparing invoice for advance payment how to mention amount. Should I need mention entire PO amount and in payment terms should I mention 60% advance and 40% or only 60% advance.
Looking forward for your keen reply.
you can do it both way. Either make invoice for 60 % and rest 40 on completion or else you can issue a payment receipt for 60% amount. It should be kept in mind that in both the situations you will have to collect 5 % VAT.
Do we need to apply VAT on 100% discount sale invoices in the absence of Base value?
In case of 100 % discount, and no base rate VAT will be 0. You have to show VAT 0 to avoid discrepancies with FTA.
Dear Mr Fahim,
i already file our VAT in fta, however when im going to pay the vat amount through debit card is failed?
can u advise me what cause why is failed?
thanks
regards,
Dennis
There can be 2 reasons for the same:
1. Either your debit card isn’t authorized by the bank. Sometimes some cards aren’t authorized for online payments.
2. Might be an issue of overloading on FTA website and site response. which isn’t possible. Try later making payments.
Can ITC on passenger car purchase by owner on company name and paid of by the company as well. Car to be used by the owner.
Claimable
Dear Sir,
About Health care Clinic we are giving zero rated invoices and We don’t have that much vat purchases also and we don’t need to refund. So how to file the return?
As per the instructions of FTA, the vat return should be actual. So you must report the transactions of purchase and sales as they are done. If your turnover is less than the required amount you can deregister you VAT Registration. This is the second option.
Sir
1.We are purchaseing material from UAE local with 5% Vat and same material exporting to oman 0% vat , my question is, can we claim input vat made on local purchase send to oman
pls advise
Thanks you
Yes, You can take input.
Dear Mr. Fahim,
Good morning. Sir, we are a private clinic thus we are supplying zero rated services to our clients. I would like to ask if we are eligible to claim recoverable input tax from our clinic expenses such as goods that we purchased with Vat of 5%. We really appreciate your response on this matter.
Thank you.
Yes, you can obviously claim input of such items.
We have Two doubts related VAT
1) We supply goods to Saudi Arabia.
The Saudi VAT authorities is asking our customer there to pay VAT there for the purchase from us.
Is it necessary to take VAT from Saudi customer ? Or shall we issue invoice excluding VAT, because customer is forced to pay VAT there.
2) Prepaid Expenses
We would like to know the status of claiming Tax for prepaid expenses.
For example, we pay rent starting July 1st 2018 and ending July 31st, 2019, in a single cheque payment.
Will we able to claim the input VAT wholly now or proportionately six months in this financial year and six months in the coming financial year?
1. Exports to customer registered under VAT in the GCC VAT implementing state a in the destination State (Currently only Saudia Arabia) it will be zero-rated and the customer will pay the VAT in destination GCC state.
2. Input will be claimed as it is paid. If paid in full it will be recovered in full and if paid in part like multiple post-dated cheques. THen it will be claimed respectively.
Dear Mr. Fahim,
Good morning. We are a private clinic supplying zero rated services. I would like to ask if we are eligible to claim or file for recoverable input tax to FTA from the expenses of the clinic such as office rent, telephone bills, electricity and other goods that we paid with a 5% Vat. Previously we filed for Vat Return without submitting recoverable input tax because we are not sure if we can recover input tax since we are clinic under healthcare services with zero rated supplies. We do appreciate your kind response on this matter. Thank you.
Hi Leizl, Thank for approaching us. Any VAT paid expense done for enhancement or helpful in making taxable supply can be claimed. Thus you can claim input on such expenses that you have mentioned.
Hi, I have two question about TAX Input Claim
1) if Supplier Invoice booked after 2 month or more then that for any reason (like supplier forgot to bill, Inv. Rec. Late or any XYZ Reason) Can you claim that TAX in current month.
2) if Bank Didn’t Provide TAX Invoice but in Statement it Charge TAX on Transactions and Bank has VAT Number, then are we eligible to claim TAX on that
Thank You
1. You cannot claim amount which has not been actually paid or initiated/reported in suppliers books of accounts. If you have paid any amount without bill which again is impossible then the supplier has to issue the bill of backdating (time on which the supply took place).
2. You can claim the VAT by the bank against the statement. In case of audit or clarification to FTA, you need to present the statements to FTA. On logical grounds the same entries will be automatically verified in fta’s system. So I don’t think such query can arise.
Thank you So much for you Reply Sir, but in my first question, supplier gave invoice of back date (Example “Jan-18 Invoice”) but in jun-18 so can I book that JAN-18 Invoice in june-18 and claim in Jun-18 itself for VAT or I have to claim in Voluntary Disclosure.. Again Thank You for you help SIr.
You are welcome dear, If your VAT return period has gone then you and your supplier both need to report them in adjustments and provide voluntary disclosure. If vat period still there then you can report in the current return. This is the case where you both haven’t reported. A simple solution to do that is to get the invoice in the current date.
If your supplier has already reported the invoice as on date then you will have to report in the bill in adjustments and provide voluntary disclosure.
Hope everything clear.
Dear Sir,
Please let me know, how FTA will verify the records.
Is there any cross check companies which we provide services.
Please let me know.
Looking forward.
I have filed VAT returns for the first two quarters and not I have received 1 purchased invoice related to Jan’18, the invoice is not yet booked or paid. Can I receive this invoice and will I be able to claim input VAT?
Dear Umair, Your query is a little bit confusing? Unpaid invoice and want to claim input? or Invoice not received? What you want to know please specify.
Dear Sir,
Good evening.
We purchased one printer and using for office to print invoices and other documents.
Kindly, please suggest is it possible to claim VAT paid on purchasing of printer.
Looking forward for you valuable reply.
Thank you sir.
Yes, you can claim input if the invoice is in the name of the company.
Dear Sir,
Thanks for your reply. Please suggest shall we claim total VAT amount in the same tax period.
If you have paid in installments then claim accordingly otherwise full amount of VAT
Dear Sir,
Please suggest, in UAE on which basis VAT should pay. Cash Basis or Accrual basis. Sometimes we use to raise invoices for 100% in advance/ advance payment invoices and not received within the tax period.
Also sometimes, we do the work first and then raise the invoice, in this case how to treat.
Kindly, please help us to solve it.
Looking forward for your valuable reply.
Cannot understand your query dear. Please elaborate it.
Dear Sir,
To claim input VAT, what are main things should be on bill/invoice.
Only, company name and TRN or Company name, TRN and address also ?
Name and TRN
Dear Sir,
We are located in Dubai, my client located in Sharjah.
When we are reporting tax, should we mention the amount in Sharjah column?
Please advise.
Reported according to the place of supply. Your place of supply in Dubai.
Sir we missed to recover input tax of 2 invoices from may month. So can we claim it by current period? (invoice date is may month)
Dear Nishad, WIth reference to your same query multiple times, the answer is that you can report these invoices in preceding return and claim the input.
Hi sir,
We already submitted apr to june vat payment. But unfortunately 2 purchase invoices we missed to recover input tax at that time ( invoice date is may month). So, can we claim that input tax in this current period of july to sept?. If not any other option to claim it?
Hi sir,
We missed to recover input tax of 2 purchase invoices of may month at that time. So, can we claim it in current month ? invoice date is may month . Any option to claim it now
Dear Sir,
Thanks for your valuable answers.
Please guide what is import declaration and when to use it.
We are importing some goods from Outside country. Is it need to submit import declaration.
Looking forward for your valuable reply.
Hi Rama,
Thanks for the appreciation. Here is the guide published by FTA regarding the scenarios for registered as well as non-registered entities. I hope this will guide you through the whole process and provide answers to all your questions. Click on the link below:
https://eservices.tax.gov.ae/MOF/media/MOF-Media/Downloads/VAT-Importers-User-Guide-(Registered-Non-registered)_English_1.pdf
Dear Sir
We are a franchiser and agreed to pay the rebate and shelf rent to our franchisee. They are not directly buying the finished product from us.
We received Debit note from our franchisee with regards to the rebate and shelf rent they had paid to the shop. Can we claim input vat on those debit notes?.
What is the use of a debit note here I cannot understand?
DEAR SIR,I WANT TO KNOW CAR PURCHASED IN COMPANY NAME AND FOR COMPANY USE ,CAN WE CLAIM THE VAT IN ITC FOR THE CAR VALUE. OR WE CAN CLAIM ONLY INSURANCE AND PETROL CARD ITC
Can Claim ITC
Assalam Walekum SIr How are you,I have a question related to prepayment Expenses :
Example : we paid 25,000/- (part payment) 50% by PDC Cheque to supplier in order to supply goods in future since supplier didn’t gave any invoice yet,
now in our company many time we made PDC Cheque without TAX and when supplier give invoice he remove advance payment with TAX, here we cannot claim PDC Amt. TAX because we didn’t claim during the payment. so what I want to known is this prepaid PDC is claimable. without invoice or if you can suggest us any solution of this so we can claim PDC TAX
1. It is necessary to report Advance payments in the invoice. But if your supplier is not reporting it in the invoice and making the invoice for full amount then also the ITC will be the same. if you claim ITC on PDC and then on the remaining amount of invoice or in full amount of invoice both are same. If your query is different let me know.
Is there any time limit to claim input tax. Example: The supplier has raised the invoice in Feb 2018. We have not acknowledge the material as the materials were not as per our Purchase Order. The issue was sorted out and we have acknowledged the materials in Aug 2018. The payment was released in Sept 2018. Can we claim input tax in Sept return ?
According to the laws, as the material was not acknowledged by you the purchase didn’t happen. Now, either your supplier voids the previous invoice and sent you a new invoice dated August 2018. Your purchase will be recorded in August and thus you can claim input. Reference Article 55 Point No 2 of Decree-Law No 8
Hi Sir,
We are constructing a warehouse. Is it possible to claim input tax on invoices received from the contractor.
Regards,
If the bill issued is in your name then and contains TRN and name of the company then you can claim.
Hello Sir,
Drinking water or Tea providing to employees – Is it an Entertainment expense or normal Office Expense?
regards,
It comes under employee entertainment and not claimable.
Dear Sir,
We have two assets for sale. One we bought in 2015 for AED. 25,000/- and have 0 (Zero) Net Book Value. Now we are going to sell it for AED. 7,500/-. What will be the taxable value and VAT in this case.
Second asset was purchased in Jan 18 for AED. 10,000 and book value is AED. 5000. What will be the tax treatment if the asset is sold for;
Option A – Sold for AED. 7000
Option B -. Sold for AED. 3000.
Thanking you in advance
Will research and reply soon.
Hello Sir,
We claimed input tax on an invoice received (in Feb 2018) from our supplier , but did not pay to the supplier for the invoice. Is there any VAT issues if we withhold the invoice amount more than 6 months.
Regards,
No
Hello Sir,
Our company paid rent for a Labor Camp in favor of our sister concern. Now we have to reimburse that amount from our sister concern. Do we have to make Tax Invoice with Zero rate or make Debit note in order to reimburse the rent.
Regards,
please elaborate your query.
Hello Sir,
Our company (Head Office) paid rent for a Labor Camp which is used by our sister concern. We will get reimbursement from our sister concern for the amount we paid for the labor camp. We have to give invoice or debit note to our sister concern in order to get that reimbursement. Since the labor camp is zero rated, can we issue a Tax Invoice with zero rate or a Debit note is enough as a supporting document for claiming the amount from our sister concern.
Regards,
IS the sister concern company registered under same VAT group?
Sister concern is not under the VAT Group, but they are registered for VAT.
Regards,
Issue an invoice with VAT.
Dear Sir,
Greetings !
Our company now started to construct a 3 star hotel in the last month and our Taxable expenses crossed 3,700,000/- (incl advance 3,500,000) in the last month and still we did not register our company under VAT and we have a plan to register VAT later.
If we can register later (for example in Dec 2018 or Jan 2019) the input vat paid before our Vat registration is claimable. Please advice.
The minimum turnover limit is AED 375000. You have exceeded the limit and you need to register immediately otherwise you can be liable for the penalty.
Dear sir,
Greetings!!
Company vehicle sold to unregistered person, do we charge vat on vehicle sold on full value., (vehicle book value zero) we are not in used car business..
vehicle purchased before 2018..
thanks
best regards
Vehicle Sold isn’t business transaction and thus no need to charge VAT. IF the value of the sold vehicle is reported in books of accounts will enter as capital from the director or owner.
Our company had sold old vehicle for some consideration (book value zero) to unregistered person., do we need to collect vat no that?? or its a fixed assets so no need to charge vat ..??
we are not in used car sales business..
When the car was purchased? Has input been collected on the purchase of this car which is sold?
vehicle purchased in 2013 , vat not applicable
VEHICLE PURCHASE IN 2013.,
Even if you have purchased prior to the implementation of the VAT, The Sale is made during the VAT regime. So Whatever consideration you have got, you need to raise a tax invoice for the sale price.
Whatever consideration you have got, you need to raise a tax invoice for the sale price.
Hi sir,
can we claim VAT INPUT of expenses we incurred on reconstruction of burnt warehouse against vat on income from warehouse rent.
Dear sir,
Greetings!!
can we claim vat paid on reconstruction work of burnt warehouse against rent income of other warehouses.???
Best regards
This is applicable only when you are a real estate company.
Dear Sir
Awaiting for reply..
it will be very helpful sir
regards
I have already replied to your query dear. ” This is applicable only when you are a real estate company.”
Hello Sir,
We made an invoice in July 18 to a customer (in his name) and the customer now wants to change the invoice to his wife’s name. We already submitted the return for July month. How can we change the customer details in the invoice. Please advise.
Regards,
Hello Sir,
Is it possible to claim input VAT on items purchased 3 months before getting the VAT registration (TRN).
Regards,
NO
Dear Sir,
Greetings.
Sir, we have missed one Invoice to record in the books and and VAT return also. Recently only we got to know that we missed one Invoice. Please suggest what will the solution.
We are maintaining invoice numbers without that invoice. How to add that invoice to invoice list and how to pay VAT on that invoice.
Kindly please suggest.
Thank you.
report that invoice in next tax return. Either you can give it a current number or cancel that invoice and issue a new invoice with the current invoice number.
Dear Sir,
Thank you very much for your valuable reply.
Please advice, if we want to cancel and issue new invoice to customer should we need to get any confirmation from customer.
Because we have already submitted that invoice to customer and missed the to record in books and vat return.
Looking forward for your valuable reply.
There are two solutions:
Easy – If that is only the problem that you have not reported in VAT return, you can include in the preceding month vat return.
Hard – Cancel invoice on both the sides and issue a new invoice. Here, if your customer has already reported the invoice in his vat return he cannot cancel it. Thus, he will issue a debit note or show a purchase return in his account and then you can issue a new invoice.
Regards.
Dear Sir,
Thank you very much.
This invoice still not reported by our customer. In this case shall we take take that invoice back and issue a new invoice with current date. ?
Also, we have submitted some invoices to our customer but our customer don’t want to pay the money due to some reasons. In this case what is solution for VAT. Shall we simply cancle the invoices? or we need to get any confirmation from customer.
Some invoices we just prepare and due to some reasons we didn’t submitted, but we have issued invoices after that number. What is the solution for the invoices which we prepared and not submitted.
Kindly, please provide your valuable answers.
Looking forward.
Regards,
Reddy.
Dear Sir,
My company is a regional office, has no sales. We have goods imported into the UAE for office furnishing and promotional items under our company license. Can we recover the amount as input tax under “Supplies subject to the reverse charge provisions”
Looking forward.
Regards,
Renu
Will Check and Revert
Sir,
my company is dealing with metal scrap. we buy from small scrappers a small small quantity of metal scrap. and collect all these and export that to pakistan or india.
as these scrappers dont have TRN no. or company so we purchase all in cash so how can i show this purchases in VAT as i understand to show purchase we need company name and TRN on invoice. i show export in my vat but what to do with purchase. request your reply please.
Will check and revert
Dear Sir,
Good evening.
We have claimed one input VAT in the period of May’18 – July’18 (Actually that Purchase bill relating to next tax period Aug’18 – Oct’18). But in Aug’18 – Oct’18 we didn’t claim it.
Can you please suggest what will be the solution,.
Your suggestion will help us a lot.
Looking forward.
You mean to say you claim input tax of invoice which belongs to Aug’18 – Oct’18 tax period in advance in May’18 – July’18. Right? As you have already reported it you don’t need to do anything. But be careful. Dual reporting of the same bill in another tax period. You can be penalized.
Dear sir,
Yes we claimed in advance. But dual reporting not done.
Is there any voluntary disclose that we need to do in this case.
Looking forward.
According to the best of my knowledge, there is no need to give a voluntary disclosure as no wrong information is provided. But to be on safer side you can mail the same query to FTA email address info@tax.gov.ae and they will surely clarify you.
Dear,
We are in real estate business owned by by a Local Citizen, we are having commercial & residential building in Dubai. Now we are collecting vat from Commercial tenants. Same time we are doing material purchase for commercial& Res. Bld for building maintenance. My question is can we claim the vat what we paid for material purchase or other expenses.?
The proportionate amount used for commercial properties can be claimed. I would rather suggest getting different bills for supplies made for commercial and residential properties. So that you don’t need to make any calculations.
Dear Sir,
I’m really lucky to have such a great person like you, in your busy life you are dedicating some time to us and it is helping a lot.
Coming to my question/request – We didn’t pay tax from last two quarters now we are planning to pay.
There are some options 1)Tax Liability Cleared First 2) Administrative Penalties Cleared First 3) Oldest Liability Cleared First.
We don’t have enough funds to pay entire balance. If we want avoid fines which amount we need to pay first.
If we pay Tax liability from that day late payment fines will stop ?
Please suggest.
Everything is necessary to pay. Try to arrange funds and clear all together to save yourself from getting hefty penalties. Oldest liability first bcoz to save from additional penalties, then tax liability to save from new penalties and then the administrative penalties.
Dear Sir,
Greetings!!
Water & electricity bill paid by company for labour camp , is it claimable as a input tax.,
Bill is in the name of company..
thanks
best regards
Murtaza
not claimable
Dear Sir
Input vat on some purchase we failed to claim in the previous tax period. Can we include them in the current return or should we make voluntary disclosure ?It was due to a error in the system
yes.
Dear Sir,
Thanks for your valuable replies.
We have changed our office address recently, should we need to change address on VAT Invoice? or we need to continue the address which is there in VAT Certificate. Still we didn’t change the address on VAT Certificate.
Also, is it mandatory to submit the invoice to the customers ? because some customers they will pay/deposit the money directly without collecting the invoice.
Kindly, please provide your valuable answer.
Looking forward.
Address needs to be updated on the invoice as well to FTA. Invoice issuance is mandatory. If the client doesn’t want the invoice for claiming input then its ok. But you need to issuance keep your copy to avoid penalties.
1. Can we claim input for accommodation provided to staff and vat paid on that ?
2. if we are making inter company sales, (with both companies having separate trade license but same ownership), without having a group trn no., do we need to charge vat to the other company ?
3. And also, the sales is happening at the same price as the purchase price, so one company’s sales is purchase for another company, then the second company is adding value and selling it to third party, so can both the companies claim input for their respective purchases ?
1. No
2. Yes
3. Yes
we have been charged vat on labour camp accomodation in abu dhabi , can we recover the input vat on the same
Input Cannot be claimed.
If the last VAT return contains correct input VAT amount but the wrong purchase/exps. amount, how do we rectify it in the next submission ?
File voluntary disclosure of wrong reporting.
Dear Sir ,
We have Purchases invoices for the month of Jan , Feb , March
which we didn’t claim as our Input .can we now consider it in our December return ? or in our Yearly return ?
Regards
Logically you can claim. But I would rather suggest to raise this query with FTA and receive their guidance.
Dear Sir ,
payable which are outstanding beyond six months from the agreed date of payment and on which Input VAT has been availed. As per VAT Laws, Input VAT in such cases need to be reversed as they cannot be claimed any more.
is it a right statement ? even we have intention to pay as right now cash flow problem is there so we will make payment later on so what will be the scenario
This article will help you understand the situation properly.
https://exceldatapro.com/bad-debts-output-vat-adjustments-uae-vat-law/
Dear Sir,
We have very little amt purchase from unregistered person ,
is it ok to show it as a zero rated purchase ?? or we need to pay VAT on his behalf and claim as a input credit.
unregistered person providing invoice (not tax invoice) for purchases from him..
thanks
best regards
Murtaza
According to the ruling you need to report them in books.
i had entered in books at zero rated purchase.. is it ok??
Please consult FTA for this query.
Dear Sir
We manufacturer and sells fruit juice to Distributor. Our distributor rise tax debit note against us for rebate and discount he give to the retailer. Are these input VAT on debit note recoverable?
Does the money come in? I think its only difference of money in billing against debit note. SO no input will decrease by that amount.
Dear Sir
Money came full of the sale value. After that they raised the tax debit note. Actually we agreed to meet such expenses, but the VAT treatment is doubtful.
raise your query to FTA. Bcoz if the treatment of VAT not proper then penalty might arise.
Dear sir
i have 2 queries:
1. For grocery without bill, i cannot claim VAT right. if so, when i add bill, should i add it as zero VAT? else there will be difference in P/L
2. reverse charge mechanism, can you please send me a clear info/link?
https://www.tax.gov.ae/pdf/VAT-Returns-User-Guide_English_1.pdf
dear sir,
i have purchase invoice dated 6 june2018, at that i was missed this invoice to enter the system and also for vat return(june2018 to aug2018). now just clarify me i can enter that invoice on nov2018 and i can claim that vat amount our current vat period(nov18 tojan 19) kindly clarify this problem.
thank you
Report it in current VAT Return. No penalty is there. Keep the documents in-case any query is raised by the FTA.
Sir, I have missed to claim input VAT for the month of March 2018 for 1 bill, AED 36004.96, Input VAT AED 1714.52, is that claimable during the coming return filing from Dec 2018 to Feb 2019
Claim it in the current tax period make a voluntary disclosure.
Dear Sir
We received money against Franchisee fees from a local company in Dubai during Jan 2018. We paid out put tax to FTA on that transaction. Now the contract has been cancelled and we have to repay the franchisee fee received earlier. Do we have to charge the VAT while repaying?
According to my understanding, it is merely the sales return kind of transaction. You received then returned it so you can issue a credit note to your client and settle the account. The same will be reported in your VAT return and your VAT amount will decrease it by that amount.
Dear Sir,
Will Drinking Water, Coffee, Tea, Tissues for office staff comes under entertainment (not Claimable) or Supply expenses (Claimable)?
Under Office Entertainment and is not claimable.
Unclaimable
Sir , i am working in Contracting company…
We have 1 private villa project, when i make invoice can i collect output vat from private villa owner…?
if i can collect the output vat .the private villa owner can claim the input vat from gvt…?
collection of vat depends on your client. If it is a commercial project then you can or else you cannot. If your client is a local then he can claim input vat on it.
What is the data requirement(s) for VAT record keeping purposes related to:
a-Imports
b-Exports
c-Zero rated supplies
Please refer the relevant Article too if possible
Thanks
Hajira, This guide will help you understand better: https://www.tax.gov.ae/pdf/Taxable-Person-Guide-June-2018.pdf
IN addition to that, Cabinet Decision No. (52) of 2017, on the Executive Regulations, of the Federal Decree-Law No (8) of 2017 on Value Added Tax Article 71 and 72 describes executive regulations related to record keeping.
Furthermore, Federal Decree-Law No. (8) of 2017, on Value Added Tax in Article 78 states the rule for record keeping.
Dear Sir Good Morning
What is the procedure of VAT for Restaurants how can they submit their VAT. what type of expenses restaurants claim. kindly give me some suggestions.
Thanks
There is no difference in the process for restaurants. You need to register and then submit your vat return online. Rules of input claim are also the same. You cannot claim things falling under employee entertainment. For claiming any input you need the receipt/bill with your VAT Number.
Thank you Sir for your early response.
And one thing more sir in construction company how can we make their bills or how can we claim vat. VAT on percentage or calculate VAT after deductons on bill.
Sir mostly our contract have with Mohammed bin Rashid housing scheme and Banks so banks did not give us the vat so what is the procedure for that payments which we receive.
Will check and revert.
Why they don’t pay you VAT? I am unable to understand this structure of the transaction. Can you please elaborate
Sir they take loan from bank and Mohammad bin Rashid Housing Scheme to construct their houses, thats why bank did not take us VAT.
Generally, it is not possible. It is possible only if the Mohammad bin Rashid Housing Scheme is exempted from VAT. Secondly, you can claim input for bills that you pay with your VAT number on it except employee entertainment. For more clarification, it is advisable to write directly to FTA. You may contact the Federal Tax Authority through the inquiry form or send an email to info@tax.gov.ae. You can also call on 600 599 994 or 04-7775777.
SIR
we received a order from iraq for material supply on exwork term
do we need to apply VAT
we raised the invoice and shipping document on iraq beneficiary
but we received the payment from their sister concern in uae
VAT Not applicable as it is export.
Sir,
We are constructing new warehouse, office in DIC for Dhs. 7.2 Million. Contractors invoicing with vat. Can we claim this vat under input vat? or capital assets scheme?
capital asset scheme
Dear Sir,
A sister company of our who is registered in a fee zone has requested the service of an architect for a tower project which might take place outside a free zone.
This sister company has received a tax invoice from the architect. Can we ask the architect to replace that tax invoice with a commercial invoice, taking into consideration that the sister company is located in a free zone?
Thank you,
Either take the invoice in your name and claim input. If the invoice is issued in favor of free zone company VAT will be applicable. Secondly, the project is being constructed outside the free zone and thus VAT is applicable to it. According to me, it seems like finding a way to save tax. This might have serious consequences. You might be held responsible for tax evasion.
Dear Sir,
We have invoice which already submitted in the vat report (AED 1050 with 5% VAT).
Later we have changed the invoice price (AED 2100 with 5% VAT).
Please suggest now should we need to return entire VAt amount or only the difference (AED 100 – AED 50 = AED 50).
Looking forward for your valuable reply.
Hi Reddy, There can never be a problem if you follow the proper rules of accounting.
You could have solved this issue very easily:
1. Issue a new invoice of the total amount and cancel the previous invoice.
2. Issue a debit/credit note and claim the difference amount and VAT through same.
3. Issue a new invoice of the difference.
According to the ruling, you need to pay VAT as per your invoice amount. SO your liability is AED 104. You have paid 52 out of it and you need to pay 52 along with the voluntary declaration of the subject matter.
Dear Sir,
Thanks for your valuable replies.
Sir, Export goods to Kuwait will come under VAT ? please suggest.
Looking forward for your valuable reply.
export is out of scope
Can we take the sales invoices of previous year in current vat return submission, that was missed in previous year vat calculation.
You can include but you have to provide voluntary disclosure along with that.
Dear Sir,
can VAT Input of one company (don’t have Output vat as no sales) adjusted against Vat Output of another company of the same VAT Group companies.
thanks
regards/murtaza
I couldn’t get any thorough research on this. Please raise your query to FTA for clarification. If you get the answer please let us know so that we can update the same on our website.
Hello
Can you please tell me if we can claim the input credit when the registration is granted back-dated? In our case, we got the registration in August 2019 but the effective date is March 2019. Hence we have to file the return for that period. Can we claim the credit for 1st March to 31st May since we don’t have our VAT Reg No printed on the invoice? Please help asap as we are already late in filing return.
Hello Sir
We got our registration just few days back but it was backdated to March 2019. Now we are supposed to file the VAT return for March to May quarter. I wanted to ask whether we will be able to avail the Input credit on the expenses incurred during that period. We have this doubt since we have the bill but of course no VAT reg no. of ours is printed on the same. Please help asap as we are already running very late in filing the same.
According to the best of my knowledge, you have to count from the day you have received the registration and not according to the date. Bcoz the date mentioned in the registration certificate is general for the accounting year. If you need any further clarification you can contact the FTA directly to obtain the clarification.
Dear sir we are registered as group registration and accordingly running 5 branches so we have filled vat return in last june-28- but did mistake which was one branch sale and purchase we did int include while filling vat return so in next quarter which is falling 28th sep-19 can we add those missing branch sale and purchase to be in Sep-19 quarter vat filling.
File Voluntary disclosure.
If a company related purchase invoice made in the name “cash” or “company owners name”, can it be claimable under company TRN?
If under AED 10000.
Dear Sir,
One of our customers defaulted our sale invoice and gave case against the customer. Our lawyer send us their VAT invoice for their service. Can we claim this VAT input?
Regards,
Yes, You can Claim it in Input VAT.
Thank you sir
Dear Sir,
Our company’s VAT submission is quarterly based and if our turnover is exceed Dhs.150 million during the period, do we have to apply for monthly VAT return.
Is there any penalty if we don’t opt for monthly return.
Regards,
Yes, you must opt for the monthly VAT return.
Thank you sir
Suppose if the turnover reduced to Dhs.100 million after we opted for monthly return, do we have to change the return to quarterly or still we need to continue with monthly return.
Regards,
Checked with FTA, it is not mandatory to change the return periods but can opt for monthly return voluntarily .
Regards,
Thanks for the information.
Dear Sir,
Good day!!
We had issued Tax invoice with VAt to congo customer in aug, he had given export related documents and in october end and asking for VAT Amount.
Our VAT return already filed for july to sep period now how can we change invoice from 5% to Zero rated and give VAT Amount refund.??
is it possible to issued tax credit note and give new tax invoice with zero rate???
Issuing a credit note or the complete invoice amount and then issuing a new invoice in the name of the company. Your accounting month will change please take note of the same.
Dear Sir,
thanks for reply.
so, what’s the solution..??
regards
Murtaza
I already gave the solution. But the new invoice will be current dated and hence you will have to keep a note of it. SO in future whenever a query arises you can refer to it.
ok sir thank you , i will keep all note up to date..
Dear Sir,
is it allowed to remove damage/ shortage goods via stock adjustment ??
Absolutely.
In Financial books, the entry will be
Debit Loss on damage
Credit Stock A/c
In inventory Books
Debit Scrap of damaged goods
Credit Normal Stock
Goods damaged stock account remains in P&L at the time of finalization. When you are selling for some low rate or will be written off completely from the books.
ok sir noted…
thanks for reply..
we always write off damage goods same time , once they found as it has no value..
Dear Sir
We have imported raw material from India and accounted vat under reverse charge mechanism. Now we need to return some of the imported material back to India. Should we consider as Export sale at 0% VAT or Sales return? is there any impact of vat?
Victor
It is but obvious that it is the sales return. hence will be recorded in your accounting as sales return and your vat input will decrease by that amount.
you mean purchase return right??
yes
so it will reduce RCM liability and not VAT input amount ?? so how it will be reflect in VAT return..
it should be reported in box no. 7 of the VAT form 201 during Tax Return filing. The taxpayer should be able to justify the adjustments when asked by the FTA.
yes
Dear Sir ,
we purchase Fuel from our sister company would be there back charge mechanism or forward charge …..?
The following are the benefits of VAT Group Registration for the business
1. All the entities within a VAT Group will be treated as ‘ONE’ entity for VAT purposes. This will help the businesses in simplifying accounting for VAT, and also compliance reporting like VAT returns are required to be prepared and reported at the group level instead of entity level.
2. Any supplies within the entities of a VAT group are out of the scope of the VAT. This means VAT will not be levied on the supplies between the entities of a VAT Group. However, supplies made by the VAT group to an entity outside the VAT group are subject to VAT.
Dear Sir,
do need to keep all petty cash supporting bills or only those on which i claim VAT input..
(We have lots of Parking/gatespass/food & other misc bills on which we dont claim Vat Input (as its lacks Our TRN Numbers) still i need to keep all those bills for 5 years.???
Only those on which you claim VAT
Dear Sir,
Good day!!
for making zero rated invoice (ie. export), only Export declaration from Dubai custom is enough and B/L, or need any additional documents ??
B/l is not mentioned our name, as shipment is arranged by customer himself,
Custom Exit / Entry Certificate is mandatory or not??
Regards
Murtaza
YOu need all supporting documents that prove the exit of the goods.
Any list of documents required issued by FTA??
No Proper Information anywhere
FTA can be your best guide in this. Kindly contact 600 599 994 or by contact form at the given link:
https://tax.gov.ae/en/contact-us
Dear SIr ,
We have purchases from unregistered supplier please guide me VAT impact on it
What kind of VAT purchases and what is the amount of purchase?
labour supplies and consulting fees amount is between AED 25000 to AED100,000
If your supplier’s sale is above the limit of VAT registration they have to collect vat from you and you have to pay. Then you can claim the amount as input credit and use against your output.
But if your supplier is below the range of VAT registration, they don’t need to collect VAT from you and hence your transactions will be normally reported without VAT and no input can be collected on that.
Hi
We have received debit note from supplier claiming VAT for earlier months starting from July 2019 to December 2019 which is omitted by them.debit note dated 27/02/2020.
Can we account this. Do we can get input on this.
How you advice on this.
Put in adjustments.
Hi,
Thanks for promy reply.
Could you elaborate.
Is the debit note allowed under FTA
Obviously, The debit note issued by the client is your credit note. Credit notes are part of accounting and thus are allowed. Report credit note in this month. Report the amount in your vat return.
hi,
we have constructed a building to use for our service related business. as usual we have incurred cost of construction, purchase of material and assets (equipment’s, machinery, IT equip etc) and still the construction is on going. invoices date back 2-3 yrs. (construction) – equipment & machinery (0-1 yr)
can i claim for input vat after registration.?
Nothing can be claimed before VAT implementation. After implementation, our turnover should be beyond the prescribed limit.
Sir,
I receive invoices from consultants/construction suppliers related to construction of our branch in Abu Dhabi. Is such invoices eligible for recoverable input tax claim in the same quarter ? Is percentage completion rule applicable here?
Yes, eligible for input.
Yes, progressive billing is applicable.
Dear Brother,
Hope you are doing well I just go through your comments it very helpful for us and you are doing great job. I have some point with regards to VAT so I would appreciate your valuable feedback to proceed me further. We are real estate company which is basically having their owned buildings which their real estate company is letting out.
As our real estate office are in their own building so can we claim the VAT on utilities like SEWA/Etisalat. Since the building is residential can we claim the VAT on utilities. if it so then we have not yet claimed our VAT on utilities till now so can we claim in the quarterly return and how much can we claim from last six months and where we need to put this amount in the VAT return.
For the VAT we paid on staff visa expenses shall we claim this since the TRN number is not usually mentioned such type of documents. We have not claimed it yet.
For cash TAX Invoices since the TRN/Company name is not mentioned like LULU/supermarket /can we claim the VAT on these. What about the all other cash purchases which we don’t have proper invoice how could be claimed this VAT.
For the payment if have made earlier and we missed to claim input tax for last last quarter can we claim in the next quarter and how it can be claimed in the VAT return under which account exactly.
For the other group companies the supplier issued VAT Tax Invoice in our name as we make payment. how could we claim input vat which we paid on to them.
Please advise us know for all the above points
Much appreciate your help here.
Thank you
1. Any VAT paid for services of the residential property, such as service charges, maintenance charges, electricity, or water, cannot be recovered.
2. A business incurs visa costs for its employees and pays 5% VAT on the cost of Visa. You will be allowed to recover the input VAT on such expenses. This because the cost incurred here is to enable their employees to perform their duties and it is normal business practice.
3. If cash purchases amount is less then AED, 10,000 then it can be claimed without TRN.
4. Unclaimed VAT can be claimed through voluntary declaration.
5. If the VAT invoice issued in your name then you can normally claim it in the input section.
Dear Sir,
We Start New Super Market Business, before Licenses We started Purchases from JAN2020 under New Company Name and Sister Company Name (suppliers not giving bill under new company name) , all payments done by New Company Bank Account to suppliers, After Licenses Issued 11-Feb-2020 we Got TRN effective Date 1 March, and 1st Return 1-3-2020 to 31-5-2020,
We Could disclosed Only 3 month Sale output and VAT input. We did not Claimed Purchases input from Jan2020 including (1) Purchases before licenses issued from Jan to Feb 10 (2) Purchase after Licenses from Feb to 31, March,
Please help can we claim unclaimed amount both before licenses issued and after license issued.
Thank You
Dear Fahim,
Thanks for your feedback above
May I ask more clarity for Point No 1 in related to the utilties which we are using in our office shall we claim it. If it so then how many months which we have not yet claimed we can recover.
for point no 3 you advised that if trn is not here then what about company name is not mentioned .
for Point no 5 the invoice paid on behalf of our sister concern we can claim input vat even if there not yet registered in the vat these companies. Since they don’t meet the minimum requirement for vat registration what do u suggest for those cases. This is infact huge amount of VAT paid on procuring the construction material/machinesby the parent.
To get more clarity In general any VAT input which not claimed during last two quatar can be recoverable in this quater.
Many Thanks
1. Yes, YOu can Claim all in one go as not yet claimed.
2. Simplified bills will not have either the company name or the TRN. Hence it is claimable in both cases but bill amount should not be above AED 10,000.
3. As mentioned earlier by you, if the VAT invoices are made in your company name which is registered then you can pay and claim VAT. But if the VAT invoices are made in the name of the sister concern company then you are not eligible to claim.
Dear Fahim,
Thank sir once again you answer the queries above
The Parent Company whose paying salaries/utilities/marketing/other expenses on behalf of Sister concern should parent need to raise the VAT invoice on monthly basis to sister conern for these services provided or not in case of both scenario.
1- Unregistered sister conern in VAT
2- Registered sister concern in VAT
Many Thanks
Just because the parent company pays the expenses do not require any Tax Invoice to be raised. it is just a payment not a service/goods trasnfered. if parent company is paying salary to employyes who are in parent company visa and if it is back charged to sister concern, it should be through tax invoice.
Dear Mr. Fahim, After going through your blog, i feel, i have come to the right person to clarify my doubt?
My proprietor, who is a uae national, has given contract to construct his building which comprise of commercial units and residential flats, which will be rented out after completion.
Cost of both commercial units and residential flats will be above 5 million.
He has received his first payment certificate with VAT @ 5% on 10% of work completed.
He has applied and taken TRN number
a) Kindly explain me how and when to take input vat for both commercial units and residential flats?
b) is it after completion or as and when he received work completed certificate with 5% VAT falling withing the filing period?
c) Whether he has to apportion input vat on the basis of built up area?
Mixed-use development is a building or plot of land which has clear and distinct areas that are put to different uses, which would have a different VAT treatment when supplied.
For example, A building that has retail units on the ground floor, office space on the middle floors, and residential units on the top floor is a mixed-use development.
A) Input VAT proportionate to commercial supply will be claimable.
B) As and when he received work completed certificate with 5% VAT falling within the filing period.
C) Yes, you have to apportion input vat on the basis of built-up area.
Mixed-use development is a building or plot of land which has clear and distinct areas that are put to different uses, which would have a different VAT treatment when supplied.
For example, A building that has retail units on the ground floor, office space on the middle floors, and residential units on the top floor is a mixed-use development.
A) Input VAT proportionate to commercial supply will be claimable.
B) As and when he received work completed certificate with 5% VAT falling within the filing period.
C) Yes, you have to apportion input vat on the basis of the built-up area.
Thank you Mr. Fahim,
I need some more clarity:
Real Estate VAT Guide states that,
for commercial units (if cost is more than 5 million), we need to apply Capital Assets Scheme. that means, Capital Assets Scheme is applied only after the occupation of building or put to use.
Like wise, my understanding in the case of residential flats is that, the first supply (here it is rented out) within three years is zero rated, that means, I can claim input vat only after we rent it out first time for residential purpose.
Kindly clarify on these two issues.
Dear Mr. Fahim,
I will write the exact transactions in detail, kindly clarify
My proprietor, who is UAE national, has given contract to a construction company to construct building which will have both commercial units and residential flats, which will be rented out after completion.
my proprietor has taken vat registration number in his personal name.
the contractor has given his first payment certificate with 5% VAT (10% of work completed, the building will be completed in December 2020). (contract value AED 13.75 million, i.e., commercial units AED 6.5 million, residential flats AED 7.25 million).
kindly clarify, in our vat first vat quarterly return, whether I have to file NIL return or can we claim back 5% vat paid to contractor on our first payment certificate.
kindly clarify, when to claim back vat on commercial units and residential flats.
1) Can we claim back vat of both commercial units and residential flats?
2) is it during every quarter?
3) is it after completion?
4) do we have to apply capital assets scheme for commercial units?
5) in the case of residential flats, after completion, do we have to calculate, apportion and claim input vat whenever a flat is rented out (within three years)?
Mrs. Naheed, kindly consult FTA for further clarification.
Share the guide with me at info@exceldatapro.com so that I can understand the interpretation.
Dear Fahim
I need to ask you brother landlord registered in VAT. Since he owned Industrial Area which is mostly for commercial and we are paying on every quater the VAT since there is no purchases from long time to claim input VAT. My Question turnover for the last year is less than the VAT threshold which is AED 375k so shall we go for the vat deregistration since we are only paying VAT ever quater. Or we will keep VAT registered and file the quatertly return so what is procedure for filing dregistration. Please advise above.
Thank you
If the turnover is less than 375k and you don’t expect to rise in the coming months then you can opt for deregistration.
VAT Deregistration for VAT in the UAE is an online process that can be accessed through the Federal Tax Authority’s online portal. Before proceeding for VAT Deregistration, the applicant should consider various aspects such as turnover requirements or discontinuation of business, etc.
The Registrant must apply to the Authority for de-registration in accordance with the cases mentioned above, within (20) business days of the occurrence of any of them.
The Authority shall accept a Registrant’s application for deregistration where the above two conditions are met. Open the online @ https://eservices.tax.gov.ae/en-us/ web portal for deregistration for VAT in the UAE.
If the registered person doesn’t deregister within the prescribed time period as per the law, it will attract a penalty from the Authority.
Once the FTA confirms acceptance of your de-registration application form, you will be notified of the message of “Deregistration Pre-Approval”. The status of your de-registration in the dashboard will be changed to ‘Pre-Approved’.
You shall also be required to submit a final tax return which will be generated by the system in the “VAT returns” section. You will receive an email and an SMS notification informing you of the status of the application and requesting you to complete the payment of the outstanding liabilities.
Thank you sir for your valuable feedback
Hi Fahim,
I appreciate your forum help us a lot. Here I need to ask you about the residential Property.
The residential property construction completed and as per VAT will be first three years zero rate and then after will be under exempt since due to the residential nature. If it is zero rate and not declared earlier the zero rate amount shall be declared in this month quaterly return along previous months as well. what are VAT implication for it.
Please advise on it is there any penalty from FTA for not delcared earlier.
You have to file a voluntary disclosure for not reporting those zero-rated sales. The penalty amount will reflect in your return.
Hi Fahim,
Kindly help us regarding the invoices paid on behalf of other group company with the VAT amount. Shall we claim those input expenses since invoices are in name of parent company. This group company is not yet registered company in VAT since turnover not yet reached AED375K.
It is still required to raise the VAT invoice to this non registered group company from parent company for this payment made.
Please advise
Thank you
will check and revert
Dear Fahim,
May I know you advice on above
Thanks
Hi Fahim,
Our company made an Advanced Payment to our vendor (80% to be specific), and in this particular case the vendor raised the tax Invoice afterward (within the 14 day period), however due to the timing, the advanced payment that we made to our vendor took place at the end of a VAt return filling period, while the Tax invoice date issued by the vendor is in the subsequent VAT Return filling period.
1. Once we received the Tax invoice from our vendor, we created a bill in Zoho books (Bill Date created in Zoho books (5th January 2021)
2. The (80%) Advanced Payment for this Tax Invoice had already been made 13 days before the Invoice Date, so after we created the bill in Step 1, we then recorded payment made in Zoho books against this Invoice (The payment made date recorded in Zoho Books: 23rd December 2020)
3. We then generated a VAT return report in Zoho books for the filling period (1st Oct – 31st Dec 2020) and with our understanding of the date of supply concept, we were expecting to see the above-mentioned transaction reflected on this report. However this was not the case. And this transaction is only being reflected in the following period which basically means that the system is considering the Invoice Date as opposed to the Payment Date which came first.
I hope I was able to fully explain this issue, and really looking forward to hearing back from you soon.
Thank you.
According to my understanding, when an invoice is created in Jan how can its payment reflect in yoYes an amount of advance might be reflecting in the previous period and will be settled against the invoice in the next return. As the Payment made doesn’t have any doc supporting against which the payment was made in the previous period it will not reflect. Thus, this invoice will be reported in the subsequent tax return. Hope it is clear.
Hi,
This is a case of input tax recovery. You can recover input tax paid when following both conditions are met.
a.valid tax invoice is recived
b. intention to make payment is existing (invoice approved, etc.)
Since you received the invoice in January and hopefully paid or intents to pay that invoice, you can revoce input in Jan-March period.
If you get vendor invoice 300 days after the date of payment, then also, you can claim on that day, but you have to keep proof of date of receipt of invoice. ( Sometimes we have to make many requests to get proper tax invoice if vendors make error like omitting our TRN number, etc. IN all those caes tax invoice may be recived many days after supply of goods by them. )
thanks for sharing such useful information
Mr X has printing company. They are buying items from Supermarket . small small amount but the total monthly bill raised to around 4 to 5 thousand in terms of VAT. currently he is not claiming it as the invoice is cash invoice and not in his company name. seeking your advise
Thanks for the info!
hi,
what if supplies are less than AED 10000 but recipient is tax registered, can we claim input vat in that case, though supplies (goods & services) are for the business purposes only but invoice does not have recipient details (like name,trn number & address), mostly retail companies are issuing simplified tax invoices (like carrefour for example), you buy a laptop for business & laptop is for aed 2000 only, can we claim aed 100 as input vat?