UAE VAT Update: FTA Decision on Tax Invoices
The UAE’s Federal Tax Authority (“FTA”) has issued an important clarification through the Decision No. (3) of 2018 on Tax Invoices.
As per the current VAT law, the VAT registered businesses issuing Tax Invoices/Tax Credit Notes are required to state the name and address of the recipient of the supply. Where such issuance of invoice/credit note does not comply with the requirement under the law, there could be penal implications on the businesses issuing such documents as well as businesses claiming input VAT based on such invoices.
There has been an ambiguity whether the mailing address would be regarded as compliant under the law and as such VAT registered businesses have been taking a conservative approach by stating the complete address of the recipient.
It has now been decided by the FTA that stating of the mailing address of the recipient of supplies on the Tax Invoice/Tax Credit Note will be regarded as a sufficient compliance. It is not mandatory to state the physical address of the recipient.
This gives a relief to many VAT registered businesses in complying with the VAT law and reduces the administrative burden.
Click here for the Decision
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