A key idea in VAT is the date of supply, which establishes the tax period during which a transaction’s VAT must be reported. The UAE VAT law provides specific guidelines for figuring out the date of supply for both products and services. This comprehensive tutorial explains how to calculate the date of supply under UAE VAT laws:

1. General Rules for Goods

The earliest of the following occurrences is often the date of supply for commodities.:

• Date the goods are transferred: This is when the goods are delivered to the customer, and they take ownership.
• Date the goods are made available: This applies when the goods are placed at the disposal of the customer, even if they haven’t physically moved.
• Date the tax invoice is issued: This is the date when the supplier issues an invoice to the customer through high quality professional audit services UAE.
• Date the payment is received: This is when the supplier receives payment for the goods.

2. General Rules for Services

The earliest of the following occurrences determines the date of service delivery:

• Date the services are completed: This is when the service has been fully performed.
• Date the tax invoice is issued: This is the date when the supplier issues an invoice to the customer for the services rendered.
• Date the payment is received: This is when the supplier receives payment for the services.

3. Special Rules for Continuous Supplies

The date of supply is established in the following manner for ongoing deliveries of products or services by professional consultancy firm in Abu Dhabi:

• For periodic payments or consecutive invoices: The date of supply is the earliest of the date of issuance of the tax invoice or the date of receipt of payment.
• For goods supplied under a lease or similar arrangement: The date of supply is the date each periodic payment becomes due or is received.

4. Specific Scenarios

• Construction and related services: The date of supply can be determined by the completion of milestones or stages of the project, as agreed in the contract.
• Supply of vouchers: The date of supply is when the voucher is issued or when the goods/services to which the voucher relates are supplied.

5. Exceptions and Special Cases

• Deposits and advance payments: If a deposit or advance payment is made, the date of supply is the date the deposit or advance payment is received.
• Self-supply of goods or services: If goods or services are used by the business for non-business purposes, the date of supply is when the goods or services are used according to accounting services in Abu Dhabi.

Practical Examples

1. Goods:
2. Example: A company sells a machine to a customer. June 1 is when the machine is delivered, June 5 is when the invoice is sent, and June 10 is when the money is collected. Since June 1st is the earliest event, it is the date of supplies.
3. Services:
4. Example: A consultancy firm completes a project on March 15, issues an invoice on March 20, and receives payment on March 25. March 15th is the supply date because it is the earliest event.

Businesses may make sure they adhere to VAT reporting regulations, stay out of trouble, and keep correct financial records by precisely calculating the date of supply. To ensure that your VAT compliance is complete and precise, top audit firms in Abu Dhabi can help you navigate these regulations.