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While making the supply of goods or services by a taxable person located in the state (Dubai) to a person outside the state or while providing goods or services to MNCs, the invoice is usually issued in foreign currency (preferably $ USD). Exchange rate adopted for conversion of foreign currency invoice is usually exchange rate readily available on the various website or as mentioned on online accounting software. This treatment can render VAT return as incorrect.

Since Article 69 of the Decree Law specifically states that if the supply of goods or services is made and the client is billed in any currency other than UAE Dirham, then tax invoice shall be converted into UAE Dirham according to the exchange rate as approved by the Central Bank at the date of supply.

If a taxable person supplies multiple goods or services, then each line item will contain both rates and the total amount in $ USD and UAE Dirham for the purpose of VAT tax invoice.

This provision will also have an impact on the contract that was existing before the introduction of the VAT or which have one single exchange rate agreed for the duration of the contract. Each contract will be re-evaluated and billed according to the exchange rate prevailing at the time of supply.

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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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