How is VAT calculated on a price that includes VAT?

Article (25) Page 9 of 26 26 من9 صفحة Tax Rate 1. Tax shall be applied at the standard rate of 5% of the value of the Supply or the value of Imports, unless this Agreement provides for an exemption or the zero-rate on such supplies. 2. Without prejudice to the obligations provided for under this Agreement and the Local Laws, published prices in the local market for Goods and Services must include VAT.

How do I calculate the VAT included in the amounts I receive from the client? The VAT included in any transaction is calculated by dividing the price by 21. Example: Calculation mechanism: Price including VAT = AED 220 VAT included in price = AED 220 ÷ 21 = AED 10.48 What are your obligations after registration? After registering with the FTA, a taxable person is referred to as ‘Registrant’. Advertise prices inclusive of VATA registrant must ensure that prices of goods and services advertised to consumers include VAT, whether in food menus, catalogues, or price tags. 1 Issue Tax Invoices for each sale of taxable goods or services A registrant must issue valid tax invoices for each taxable supply of goods or services. The issuance of proper tax invoices is one of the tax compliance requirements that must be adhered to in the course of making taxable supplies. Make sure that all the tax invoices you issue meet the necessary criteria, as below. The Tax Invoice shall include the following: - The words “Tax Invoice” clearly displayed on the invoice. - Description of the goods or services supplied. - The name, address and Tax Registration Number (TRN) of - Unit price, the quantity or volume of the supply, the the supplier. - The name, address and TRN (if registered for VAT) of the recipient. sequential tax invoice number or a unique invoice -A number that enables the identification of the tax invoice and its number in any sequence of invoices. - Date of issuance. - The date of supply if it is different from the date of issuance. payable VAT rate and payable amount (in AED) for each good or service. - Any o¬ffered discount rates. - Total amount payable in AED. - The amount of the tax payable in AED and the applicable exchange rate. - If the recipient is required to account for VAT, the invoice must include a reference to this, and a reference to the relevant provision of the Law.