DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

VAT for United Arab Emirates


#24



#25

Based on the full text of the decree-law, it appears two tax codes are required:

  • UAE - VAT 5% (already added)
  • UAE - VAT 0% (to be applied to specifically designated goods and services, not tax-exempt items)

In both cases, the titles of forms should be changed as follows:

  • Invoice to Tax Invoice
  • Credit Note to Tax Credit Note

Nothing is mentioned about amounts in words. @Sarika, why do you think amounts in words are required? I will invite @lubos into this topic so he will be aware of the requirements. They go into effect January 1, 2018.


#26

The latest version (17.11.4) is adding VAT 0% tax code and making title show Tax Invoice.

It won’t rename credit notes yet.


#27

Firstly, Thank you understanding the new law taking place in UAE and requesting for the customize features required for the same.

Regarding the the total Invoice amount should be in words, As we have attended many workshops and seminar to prepare for VAT in UAE, these were the pointers to adhere to.

I have links to various VAT consultants / Agents website where they have specified the amount should be in words.

Will try and post direct link from the government but as of now that’s all that i have in support to my requirement.


#28

Thank you. As per information you have provided, this is one company’s product. Since they are in the business of making Excel templates, they may wish only to demonstrate their expertise in adding features. That is why the direct government regulation is needed. The decree-law refers to some implementing regulations, which may not be available yet.


#29

Good Morning;

to use manager or other software, it should be accredited by UAE FTA, is this something you are working on it guys ?

here is list of requirements for accreditation of any accounting software

https://www.tax.gov.ae/requirement-tax-accounting.aspx

Regards;
Ayman


#30

@lubos

Any update on this?


#31

Review of information at the UAE portal does not reveal any requirements for invoices. Nor does it define tax accounting software. As normally understood, Manager is financial accounting software, not tax accounting software. Requirements for certification of tax accounting software are also not defined. And despite references to information in legislation, the decree-law is silent on these subjects, too.


#32

Yes @Tut The whole VAT Thing still new, and nobody knows.

will keep posting here about requirement if i got to know about them,

Regards;
Ayman


#33

Dear Lubos,

To register your software as an official approved software, these are the concerned regulations:
https://www.tax.gov.ae/pdf/requirement-document-for-tax-accounting-software.pdf

For Tax Invoice & Credit Note Formats, Article 59 of the Federal Law (8) describes in detail the requirements for an invoice / credit note to be considered a Tax Invoice or Credit Note.

https://www.tax.gov.ae/pdf/Cabinet-Decision-No-52-of-2017.pdf

Best Regards,
Taher Nomani


#34

@lubos will, of course, need to determine whether Manager will be adapted and submitted for certification. But I will observe that the requirements for approval go far beyond anything Manager provides for any other country. It currently has only two tax worksheets (Australia and UK). It does not determine tax, prepare returns, generate audit files, or almost anything else required by these regulations.


#35

@lubos have you considered manager to get accredited with Federal Tax Authority of UAE ?


#36

@m_mianoor every edition of Manager is going to have a white-label variation. If someone wants to re-brand Manager and register their re-branded Manager with Federal Tax Authority, that’s up to them. I’ll just make sure Manager is accreditable on technical merits.


#37

Dear Lubos,

I didn’t know if I should have started a new topic for this question as it is related to VAT for UAE but is regarding the UAE VAT Returns format.

I have a question regarding the VAT returns format, can we in the tax codes bifurcate codes by UAE states as that is a requirement for VAT return filling. So instead of a standard rate of VAT 5% and VAT 0%, we would need:

Abu Dhabi - ADH VAT 5%
Ajman - AJM VAT 5%
Dubai - DXB VAT 5%
Fujairah - FUJ VAT 5%
Ras Al Khaimah - RAK VAT 5%
Sharjah - SHJ VAT 5%
Umm Al Quwain - UAQ VAT 5%

I tried making different Sales account by the above states that works only if the item is not an inventory item, for all inventory items they go to either to the default account or the custom one set in the items, we can’t dynamically change the account it is posted to based on the state.

If above changes are not possible please suggest the best way to move forward to get a bifurcated tax report ?

Thanks in advance.
Best Regards,
Taher Nomani


#38

@Taher_Nomani, you have been providing the best information so far on UAE VAT requirements. Where does your screen shot come from?

As you can see from earlier posts, no one asked for tax codes by individual UAE state. The way to handle this is to have in-built 5% VAT codes for all. This was done for India’s new tax scheme.

Is it true that no one will be able to use the UAE VAT 5% that was added? Should that one be removed? And what about the UAE VAT 0%? Should that be replaced with 0% codes for each UAE state?


#39

i guess this can be achieved by Tracking Codes. a tracking code each for every UAE state.
@Tut your thoughts?

i do not think the UAE govt would legally suggest having different tax names based on the state. the tax remains the same and they just want them bifurcated for the tax reports filing.


#40

Dear @Tut,

The screenshot is from a VAT Return PDF I have received at a VAT seminar, although this format is present, this format will not be physically filed. All returns will have to filed through the federal tax authority website. The format for upload over there is an xml file.

Also as @sharpdrivetek mentioned the federal tax authority doesn’t require to mention different VAT rates names. So, the VAT 5% and 0% should be fine, as long as we can in Manager bifurcate
the sales by state and give total sales for each state and taxes payables for each state.

If there is a way to bifurcate sales and taxes using tracking codes please mention how it can be done.

VAT Return Format Details

Sections in the VAT Return Format:

  1. Main Details
  2. VAT Return Period Details
  3. VAT on all sales and all other outputs
  4. VAT on all expenses and all other inputs
  5. Net VAT due
  6. Additional Reporting Requirements
    • Profit Margin Scheme
    • Goods transferred to GCC Implementing States (Currently GCC Implementing states are only UAE & Saudi Arabia)
    • VAT Paid on personal imports via agents
    • Transportation of own goods to other GCC states
    • Recoverable VAT in other GCC Implementing States
    • Tax Refunds for Tourist Scheme Provided

Format for VAT Return as per PDF received at the VAT Seminar:










Format for VAT Return is as follows (from another software vendor which is a limited one because they first ask your business type and generate the tax return report accordingly and don’t mention all of the above items and don’t mention any of the other additional reporting requirements):




XML Audit File Generated from the Same Software:

XML Format Generated

<?xml version="1.0" encoding="UTF-8" standalone="yes"?>

#41

Dear @Tut & @sharpdrivetek,

Sorry the xml file has gotten mixed with the source above. Posting the Tax Return XML File again will paste it as an image so that it doesn’t happen again:


#42

You will not be able to separate taxes using tracking codes, because tracking codes apply only to the profit and loss statement. Tax payable is a balance sheet account. Amounts posted there have nothing to do with your income or expenses, only what you owe the government.

Based on what I see, I think there will be a need for separate tax codes for all UAE states. These will then show separately in the various tax reports. But they will be lumped together in Tax payable. The fact is, Manager does not handle multiple tax codes payable to different authorities very well. There is some guidance in this Guide that might be useful if things need to be broken out. I have urged better handling and reporting of such situations for quite a while.

It’s also important to remember that Manager is not tax calculation or filing software. We often need separate programs for those activities. Currently, there are only two tax worksheets, for Australia and the UK, and only for some VAT calculations that are fairly simple.


#43

Dear @Tut,

Thanks for your prompt reply, but I think will stick to the current tax codes because tax codes are not linked by customer but by inventory item or by chart of accounts so would have to select appropriate tax code for each and every line item of an invoice.

So to solve the issue have added a custom field in each sales invoice as Place of Supply / Emirate and added option to show as column and then will export the invoice values to excel and generate a report from there. I know this is a crude method but I think it will have to do for now.

I think reports with custom fields would really help to solve this issue. So, if we could add a custom field to the tax transactions report, we could export that report to excel and then sort as required.

We could then even have the place of supply as any one of the GCC countries mentioned and calculate total sales and tax for that country also.

I do understand that manager is not a tax filing software, but it is in itself an excellent software and all the developers have done a fantastic job :clap::clap::clap:

Best Regards,
Taher Nomani