UAE VAT has applied at a standard rate of 5% since 2018, administered by the Federal Tax Authority. For an ERP, the issue is not the rate, which is simple, but the document rules, the different treatments of supplies, and the reporting that has to reconcile. This is a checklist for businesses choosing a new system or testing an existing one.
Tax invoices
- The words tax invoice, clearly shown on the document
- Supplier name, address and Tax Registration Number (TRN)
- Customer details where required, and a unique sequential invoice number
- Date of supply and issue, description of goods or services, quantity and unit price
- The VAT rate, the VAT amount in AED, and the total payable
- Credit and debit notes as separate document types linked to the original invoice
Simplified tax invoices are permitted in certain cases, so your system should support more than one document layout. Check the current FTA guidance for the conditions.
Different treatments of supplies
Standard-rated, zero-rated, exempt and out-of-scope supplies are not interchangeable. They affect what you can recover and how the return is completed. The ERP should record the treatment at line level, not as a setting on the whole invoice, because mixed invoices are common.
Reverse charge and imports
Some purchases require the buyer to account for VAT under the reverse charge mechanism, and imports bring their own handling. A system that only models domestic sales and purchases will push this work into manual adjustments at filing time.
Reporting and records
- VAT return figures produced directly from transactions, with drill-down to the underlying invoices
- A clear audit trail for edits and cancellations
- Records kept for the period required by law, and exportable on request
Arabic and English documents
Many UAE businesses issue bilingual invoices, quotations and contracts. Right-to-left layout needs to be designed into the document templates and the interface, not added by translating labels afterwards.
Payroll and WPS
If the ERP covers HR, payroll should produce the salary files required for the Wage Protection System and handle end-of-service calculations. These are the parts most often left to spreadsheets.
Plan for e-invoicing
The UAE is moving towards a national e-invoicing framework. You do not need to guess the details, but you should choose a system that stores invoice data in structured, exportable form, so it can adapt when requirements apply to your business.