In this blog we are discussing what is the time of supply, its importance and some of its special rules with respect to UAE VAT. The time of supply is normally the earliest of the following: –
1. The goods are delivered and can be made use of / the service is performed.
- Date of removal of goods – supply of goods with transportation.
- Date on which goods are made available to the customer – supply of goods not involving transportation.
- Date of assembly / installation – supply of goods involving assembly or installation.
2. Any consideration for the supply is received.
3. An invoice for supply is issued – in case of continuous supplies & stage payments.
Importance of time of supply:
- The time of supply helps decide what VAT period the transaction falls under.
- This is important because it will have cash flow implications.
- If planned properly the company can optimize its VAT return.
Time of supply – special rules:
The two special rules are call off stock & consignment stock.
- In such cases deciding the time of supply might get confusing, especially when it is a cross border supply.
- VAT here is due at the earlier of receipt of payment, date of an invoice or if the stock has been at the premises for more than 12 months.
- Often such scenarios involve the movement of the goods to a warehouse close to the recipients location prior to the date of sale – where this involves the intra GCC movement of goods the supplier may be required to make a deemed supply of the goods.
We, at msi Alnoman and Ravi, are qualified to assist you through every step for your business. Our thorough knowledge in this field is ideal to guide your business, minimizing risk, to benefit your business.
Stay posted to know more about other VAT rules.To find more information on VAT you can visit the following:–
- Ministry of Finance
- Introduction to VAT
- Understanding VAT
- What do we need to when VAT comes into effect?
- Special VAT rules
- Reverse Charge Mechanism
- Categories of VAT
- Administration of VAT -FTA