Article 39 of the decree law specifies that the value of the supply shall be reduced by the amount of discount offered provided:

1.       Customer is benefited by the price reduced.

2.       The supplier funded the discount.

Value of discount is the value by which the consideration is reduced. When discount is offered in lieu of voucher, the effect of VAT on such transaction shall differ.

discount in case of issue of vouchers

*in case consideration received is less than the value stated in the voucher

Unless the value for which the voucher may redeemed is not known at the time of issue of voucher, it may not be considered for the purpose of discount.

Example: Lakmé salon issues free voucher to avail any one service. In this case the value for which the voucher shall be redeemed is not known at the time of issuance of voucher. Therefore, the issue of voucher shall not be considered as voucher issued to give discount. Thereby, having no impact on tax payable or tax to be charged.

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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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