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VAT Accounts Record

Every taxpayer registered under VAT must maintain all records at his principal place of business.

What does the term Tax Invoice mean?

Tax invoice means “A written or electronic document in which the occurrence of a taxable supply is recorded with details pertaining to it.”

What does the term Tax Credit Note mean?

Tax credit note means “A written or electronic document in which the occurrence of any amendment to a taxable supply that reduces or cancels the same is recorded and the details pertaining to it.”

What does the term Voucher mean?

Voucher means “Any instrument that gives the right to receive goods or services against the value stated thereon or the right to receive a discount on the price of the goods or services.”

Vouchers do not include postage stamps issued by the Emirates post group

What is the date of issuance of Tax Invoice?

The registrant has to issue a tax invoice within 14 days of the taxable event/date of supply

The following are the conditions and requirements for issuing tax invoice:
  • A registrant who is making a taxable supply of goods or services has to issue a tax invoice and it should be delivered to the recipient of goods or services.
  • A registrant who is making the deemed supply of goods or services has to issue a tax invoice and it should be delivered to the recipient of goods or services if available or kept in his own records if the recipient is not there.
  • The Executive Regulation of this Decree-Law shall specify the following:
    1. Data to be included in the Tax Invoice.
    2.   The conditions and procedures required to issue an electronic Tax Invoice.
    3.   Instances where the Registrant is not required to issue and deliver a Tax Invoice to the Recipient of Goods or the Recipient of Services.
    4.   Instances where other documents may be issued in place of the Tax Invoice as well as the conditions thereof and the data to be included therein.
    5.   Instances where another Person may issue a Tax Invoice on behalf of the registered supplier.
  •  Any Person who receives an amount as Tax pursuant to any document issued by him shall pay this amount to the Authority even if it is not due.
What are the records that a Taxable Person should maintain?

The records that a taxable person needs to maintain are the following:

  • Records of all supplies & import of goods/services
  • All tax invoices and alternative documents related to receiving goods or services
  • All tax credit notes and alternative documents received
  • All Tax Invoices and alternative documents issued.
  • All Tax Credit Notes and alternative documents issued
  • Records of Goods and Services that have been disposed of or used for matters not related to Business, showing Taxes paid for the same.
  • Records of Goods and Services purchased and for which the Input Tax was not deducted.
  • Records of exported Goods and Services.
  • Records of adjustments or corrections made to accounts or Tax Invoices.
  • Records of any Taxable Supplies made or received in accordance with Clause (3) of Article 48 of this Decree-Law, including any declarations provided or received in respect of those Taxable Supplies.
  • Instances where another Person may issue a Tax Invoice on behalf of the registered supplier.
    1. Due Tax on Taxable Supplies.
    2. Due Tax on Taxable Supplies pursuant to the mechanism in Clause (1) of Article (48) of this Decree-Law.
    3. Due Tax after the error correction or adjustment.
    4. Recoverable Tax for supplies or Imports.
    5. Recoverable Tax after the error correction or adjustment.
How long a capital assets record need to be maintained?

In order to claim the tax credit on capital goods, a taxable person has to maintain a record for fixed assets for at least 10 years.

Do Taxpayers need to maintain records in case of transition provisions?

Records should be maintained in cases where contracts might have entered prior to VAT regime while the actual sale of goods or rendering of services is done post the introduction of VAT regime.

What are the other cases where a taxpayer has to maintain records?

The following are some of the situations where a taxpayer has to maintain records:

  • Maintenance of stock records and cut off of stocks batch wise before VAT law and post the implementation of VAT law coming into place will pose some challenges as normally there is no input VAT available on the pre-VAT stock as there was no tax paid on these.
  • Writing off bad debts is also covered in the law under article 64, where a cut off of 6 months is given to write off non-recoverable bad debts with an added caveat that this has to be communicated to the recipient which becomes difficult in practice. This will also warrant immaculate record maintenance.
What happens if a taxpayer fails to maintain the records?

If the records are not maintained tax authority will deny the input tax credit or will levy an additional tax on output tax apart from penal provisions

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