VAT Transactions in DEAR


Dear Systems has a wide range of sales and purchase transactions. Each of these transactions is VAT-compliant.

i.e., different VAT rules can be applied to items while creating transactions for them.


Sales Transactions

  • Estimates
  • Sales Orders
  • Delivery Notes
  • Invoices
  • Recurring Invoices
  • Credit Notes

Purchase Transactions

  • Expenses
  • Recurring Expenses
  • Purchase Orders
  • Supplier invoices
  • Supplier credit note

Once you have set up the taxes, contacts, and products in DEAR, you can start creating transactions. Transactions made are affected by the below criteria:

  • Location from where your business is operating (within a designated zone or any other emirate)
  • Place of supply
  • Contact’s tax rule

for VAT registered organization operating outside of the designated zone, your transactions will incur VAT:

  • Sales Transactions in VAT
  • Purchase Transactions in VAT


Sales Transactions in VAT

Here’s how the tax rule of your customers will affect your supply in designated zones.

 

Customer Tax Rule
Location / Bins
Tax Rates
VAT Registered
UAE
Standard rate, Zero-rate, Exempt, Out of scope
Non VAT Registered
UAE
Standard rate, Zero-rate, Exempt, Out of scope
GCC VAT Registered
UAE
Standard rate, Zero-rate, Exempt, Out of scope
GCC VAT Registered
GCC
Out of scope
GCC Non-VAT Registered
UAE
Standard rate, Zero-rate, Exempt, Out of scope
GCC Non-VAT Registered
GCC
Out of scope
Non-GCC
-
Zero-rate
VAT Registered - Designated Zones
UAE
Standard rate, Zero-rate, Exempt, Out of scope
Non-VAT Registered - Designated Zones
UAE
Standard rate, Zero-rate, Exempt, Out of scope


Let's understand each of these scenarios individually:


Case 1


Customer Tax Rule

  • VAT Registered 

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope


i.e. You're a supplier of products and services to a VAT registered customer in the UAE. The supply takes place within the UAE.


In this case, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT

Case 2

Customer Tax Rule

  • Non VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope


i.e. You're a supplier of products and services to customers who operate within the UAE and the supply takes place within the UAE and the Buyer is not registered for VAT.

 

 In this case, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT

Case 3


Customer Tax Rule

  • GCC VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope

i.e. You're a supplier of products and services to customers who are registered for VAT in any of the GCC member countries other than the UAE and the supply occurs within the UAE.


In this case, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT


Case 4

Customer Tax Rule

  • GCC VAT Registered

Locations/Bins 

  • GCC

Tax Rates

  • Out of scope


i.e. You're a supplier of products and services to customers who are registered for VAT in any of the GCC member countries other than the UAE and the supply occurs within the UAE.


In this case, the supply of goods or services can have any one of the following taxes:

  • Out of the scope of VAT

Case 5


Customer Tax Rule

  • GCC Non-VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope

i.e You're a supplier of products and services to customers who in any of the GCC member countries other than the UAE and who is not registered for VAT. The supply takes place within the UAE.


In this case, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT


Case 6


Customer Tax Rule

  • GCC Non-VAT Registered

Locations/Bins 

  • GCC

Tax Rates

  • Out of scope


i.e. You're a supplier of products and services to customers who are in any of the GCC member countries other than the UAE and is not registered for VAT and the supply takes place within the GCC.



In this case, the supply of goods or services can have any one of the following taxes:

  • Out of the scope of VAT



Case 7

Customer Tax Rule

  • Non-GCC 

Locations/Bins 

  • -

Tax Rates

  • Zero-rate, Out of scope


i.e. You're a supplier of products and services to customers who are outside any of the GCC member countries.



In this case, the supply of goods or services can have any one of the following taxes:

  • 0%
  • Out of the scope of VAT

Case 8



Customer Tax Rule

  • VAT Registered - Designated Zones

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope

i.e You're a supplier of products and services to customers who are registered for VAT in a designated zone in the UAE and the supply takes place within the UAE.


In this case, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT


Case 9


Customer Tax Rule

  • Non-VAT Registered - Designated Zones

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope

i.e You're a supplier of products and services to customers who are in a designated zone in the UAE and is not registered for VAT and the supply takes place within the UAE.


In this case, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT

Purchase Transactions within the Emirates.

Vendor Tax Rule
Location / Bin
Tax Rates
VAT Registered
UAE
Standard rate, Zero-rate, Exempt, Out of scope
Non VAT Registered
UAE
Out of scope
GCC VAT Registered
UAE
Bill of Entry, Standard rate, Zero-rate
GCC VAT Registered
GCC
Exempt
GCC Non-VAT Registered
UAE
Bill of Entry, Reverse charge
GCC Non-VAT Registered
GCC
Out of scope
Non-GCC
-
Bill of Entry, Reverse charge
VAT Registered - Designated Zones
UAE
Bill of Entry, Standard rate, Zero-rate, Exempt, Out of scope
Non-VAT Registered - Designated Zones
UAE
Bill of Entry, Standard rate, Zero-rate, Exempt, Out of scope


Let's understand each of these scenarios individually:


Case 1


Supplier Tax Rule

  • VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Standard rate, Zero-rate, Exempt, Out of scope


i.e You purchase products or services from a supplier who has registered for VAT within the UAE and the supply takes place within the UAE.


In such an instance, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT



Case 2


Supplier Tax Rule

  • Non VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Out of scope


i.e. You purchase products or services from a supplier who is in the UAE, also, who have not registered for VAT within the UAE and the supply takes place within the UAE.


In such an instance, the supply of goods or services can have any one of the following taxes:

  • Out of the scope of VAT


Case 3


Supplier Tax Rule

  • GCC VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Bill of Entry, Standard rate, Zero-rate

i.e You purchase products or services from a supplier who has registered for VAT within any of the GCC member countries other than the UAE and the supply takes place within the UAE.


In such an instance, the supply of goods or services can have any one of the following taxes:

  • 5%
  • 0%

Case 4


Supplier Tax Rule

  • GCC VAT Registered

Locations/Bins 

  • GCC

Tax Rates

  • Exempt

i.e You purchase products or services from a supplier who has registered for VAT within any of the GCC member countries other than the UAE and the supply takes place within the GCC.


In such an instance, the supply of goods or services can have any one of the following taxes:

  • Exempt

Case 5


Supplier Tax Rule

  • GCC Non-VAT Registered

Locations/Bins 

  • UAE

Tax Rates

  • Bill of Entry, Reverse Charge

i.e You purchase products or services from a supplier who has not registered for VAT within that particular country within the GCC member countries other than the UAE and the supply takes place within the UAE.


In this case, there is no tax on goods but a Bill of Entry would be required for them. For services, a reverse charge is applicable.


Case 6


Supplier Tax Rule

  • GCC Non-VAT Registered

Locations/Bins 

  • GCC

Tax Rates

  • Out of scope

i.e You purchase products or services from a supplier who has not registered for VAT within that particular country within the GCC member countries, and the supply takes place within the UAE.




In such an instance, the supply of goods or services can have any one of the following taxes:

  • Out of the scope of VAT.



Case 7


Supplier Tax Rule

  • Non-GCC

Locations/Bins 

  • -

Tax Rates

  • Bill of Entry, Reverse Charge

i.e. You purchase products or services from a supplier who is outside of the GCC member countries.


In this case, there is no tax on goods but a Bill of Entry would be required for them. For services, a reverse charge is applicable.


Case 8


Supplier Tax Rule

  • VAT Registered - Designated Zones

Locations/Bins 

  • UAE

Tax Rates

  • Bill of Entry, Standard rate, Zero-rate, Exempt, Out of scope


i.e. You purchase products or services from a supplier who has registered for VAT within a designated zone in the UAE and the supply takes place within the UAE.


In this case, there is no tax on goods but a Bill of Entry would be required for them. For services, the supply can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT


Case 9


Supplier Tax Rule

  • Non-VAT Registered - Designated Zones

Locations/Bins 

  • UAE

Tax Rates

  • Bill of Entry, Standard rate, Zero-rate, Exempt, Out of scope


i.e. You purchase products or services from a supplier who has not registered for VAT within a designated zone in the UAE and the supply takes place within the UAE.


In this case, there is no tax on goods but a Bill of Entry would be required for them. For services, the supply can have any one of the following taxes:

  • 5%
  • 0%
  • Exempt
  • Out of the scope of VAT

Taxes in Transactions


Bellow screenshot shows how to apply a VAT condition to a new Sale.



Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.