Abu Dhabi, February 16, 2019 – The Federal Tax Authority (FTA) has reported great interaction from retailers and consumers alike with its campaign to raise awareness about Tax Invoice requirements and urge all registered businesses to issue invoices for all transactions.
Titled “Tax Invoices: Your Right and Assurance”, the campaign was launched on January 28 to shed light on Tax Invoices and the conditions legally required to issue them, in addition to fostering greater cooperation between the Authority, the various Departments of Economic Development, and other relevant authorities and entities across the UAE.
Over the past two weeks, the campaign – organised by the FTA in collaboration with the Department of Economic Development in Abu Dhabi – has covered most commercial areas in Abu Dhabi Markets, Mussafah, Al Ain, and Al Dhafra, and is set to continue throughout the first quarter of 2019 to cover all seven emirates on a weekly basis. The field tours have enjoyed a great deal of interaction from staff at shop, restaurants, and hotels, as well as from consumers across the emirate who reported they had greatly benefitted from the information the campaign offers, which will allow them to fully comply with tax laws, in general, and criteria related to Tax Invoices, in particular.
“We always strive to be fully compliant with the UAE tax system and the awareness campaign on Tax Invoices was extremely beneficial,” said Abhishek Kumar, supervisor at a restaurant on Abu Dhabi’s Al Falah Street. “The main remark the representative from the Federal Tax Authority emphasised was that prices we list on our menus must be inclusive of tax if we want to avoid violations. The information was new and useful to us and we committed to implementing it immediately. As for other Tax Invoice criteria, the FTA representatives assured us our restaurant was fully compliant with legal requirements.”
Saikrishnan, supervisor at a store on Hamdan Street, said: “We have sought to be fully compliant with the tax system since its launch. We contacted the Federal Tax Authority’s call centre and referred to its official website to learn what is required of us, which is why the FTA’s team had no remarks for our establishment today, but they still provided us with important and useful information about Tax Invoices and the tax system in general.”
Meanwhile, Saqr Mohammad Al Zabi, Manager at a restaurant on Khalifa Street, said: “The campaign was very useful for us, providing simplified information and underlining the importance of issuing Tax Invoices in accordance with the legal requirements. This is highly beneficial for businesses as it helps us organise our operations and accounts, clearly outlining incomes and sales, and guaranteeing consumer rights, which makes them more likely to trust our business.”
FTA Director General His Excellency Khalid Ali Al Bustani said asserted that the “Tax Invoices: Your Right and Assurance” campaign has achieved notable success in the past few days, witnessing significant turnout and interaction from retailers and consumers alike.
“The Tax Invoice campaign is being organised in collaboration between the Federal Tax Authority and Departments of Economic Development in all seven emirates, where teams of specialists go on field tours of markets to boost cooperation and coordination between the Authority and its strategic partners in the Government and private sectors, to facilitate implementing the tax system and all tax legislation, and offer top-of-the-line services,” H.E. Al Bustani added. “The FTA experts answer queries from retailers and offer pointers regarding the legal criteria that Tax Invoices must abide by, such as ensuring displayed prices are inclusive of tax. The experts also highlight common mistakes and ways to avoid them.”
“On the other hand, our experts also urge consumers to make sure they request Tax Invoices for all their purchases to guarantee their rights, familiarising them with the many benefits that come with securing Tax Invoices,” H.E. concluded.
The campaign is part of the Authority’s efforts to promote the use of Tax Invoices across all commercial transactions, raise awareness of tax procedures among consumers, and introduce them to their rights and obligations to protect them from any attempts at manipulating the system. Primarily targeting retailers, the campaign seeks to verify that all businesses subject to Value Added Tax (VAT) and Excise Tax are complying with the requirement to display prices that are fully inclusive of taxes to avoid administrative penalties.
The Federal Tax Authority explained that Article (59) of Cabinet Decision No. (52) of 2017 on the Executive Regulations of Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT) outlined the requirements for a Tax Invoice and the circumstances in which one must be issued. When a taxable supply is made by a business registered with the Authority for VAT, a Tax Invoice must be issued and delivered to the recipient – this is applicable without exception to all supplies subject to VAT at 5%.
The FTA noted that a simplified tax invoice may be issued in two cases only: If the recipient of the goods or services is not registered for VAT; or if the recipient of the goods or services is registered for VAT, but the consideration for the supply does not exceed AED10,000. The Authority affirmed that asking the recipient whether or not they require a tax invoice is not the determinative condition for issuing and delivering the tax invoice, as the issuance of the tax invoice is considered mandatory and not optional.
The Federal Tax Authority stated that according to the Executive Regulations of the Federal Decree-Law on VAT, there are five basic requirements that must be included in the simplified tax invoice: The words “Tax Invoice” must be clearly displayed on the invoice; the name, address, and Tax Registration Number (TRN) of the registrant making the supply; the date of issuing the tax invoice; a description of the goods or services supplied; and the total consideration and the amount of tax charged.
The FTA noted that there is no requirement for line items to be shown on the simplified tax invoice at a net value, seeing as at the bottom of the invoice, the gross amount payable and the tax amount payable should be displayed in AED.
The Authority cautioned that in contrast, the full tax invoice must include for each good or service the unit price, the quantity and volume supplied, the rate of tax and the amount payable expressed in AED. The FTA also revealed that it accepts that a full tax invoice does not need to include gross amounts inclusive of tax for each line item, as the total gross amount payable and tax amount payable in AED for the invoice shall be stated.
The Federal Tax Authority noted that where a tax invoice is required to be issued and the tax chargeable on the supply is calculated as a fraction of a Fils, the value may be rounded to the nearest Fils (i.e. to 2 decimal places) on a mathematical basis.
