Unlock the Power of Electronic Signature Legality for Invoice for Goods in UAE

How to eSign a document: electronic signature legality for Invoice for Goods in UAE

So, in today’s video we will be getting into what the profit margin scheme is and all you need to know about it. Hey everyone! before you move ahead,please click on subscribe button to stay updated on a weekly business and finance related content which is incredibly useful for Business Owners’, CEOs’, CFOs’, Entrepreneur and those who inspire to be one. Now let’s back to the video. When filing your VAT return, you may have noticed a question asking if you are charging VAT as per the profit margin scheme. So, in today’s video we will be getting into what the profit margin scheme is and all you need to know about it. If you do not charge VAT as per theprofit margin scheme, then it’s important that do answer the question as no. This is because only certain taxable supplies qualified to be charged under the profit margin scheme. Under the profit margins scheme in the UAE, VAT is charged only on the profit margin, which is difference between the purchase price and the sales price of the goods. Do note that the profit margin is inclusive VAT. So how is it calculated? Let’s explain this with an example. If a used car was purchased for let’s say AED 80,000 and was sold for AED 101,000 which is inclusive VAT, the profit margin is AED 21,000 and the VAT for the sales AED 1000. VAT is not chargeable on the entire supply. What goods are eligible to be under the profit margin scheme. Second hand goods, meaning tangible movable property that is suitable for further use as it is or after repair. Antiques meaning, goods that are over 50 years old. Collectors’ items meaning stamps, coins, currency and other pieces of scientific, historical or archaeological interest. The FTA has also clarified that the goods set of purchase before the implementation of VAT and the goods that were previously not subject to VAT do not qualify to come under the profit margin scheme. Now let’s get into what are the conditions for a profit margin scheme. You would be eligible to charge VAT as per the profit margin scheme. Only if the goods were purchased from either a person who is not a registrant or a taxable person who calculated the tax on the supply by reference to the profit margin. The taxable person made a supply of goods where input tax was not recovered in ance with Article 53 of the Cabinet Resolution Number 52 of 2017. Now let’s get into what are the records that need to be maintained when charging VAT as to the profit margin scheme. A stock book or a similar record showing details of each goods purchased or sold under the profit margin scheme. Purchase invoices showing details of goods purchased under the profit margin scheme, where goods are purchased from a person who are not registrants. The taxable person must issue invoice showing the details of the goods himself, including at least the following information. The name, address and tax registration number of the taxable person. The name and address of the person selling the goods. The date of purchase. The details of goods purchased. The amount payable in respect to the goods. Signature of the person selling the goods or the authorized signatory. The tax invoice raised must clearly mentioned that the VAT being charged as per the profit margin scheme. The tax invoice should also include all other format requirements of any other regular tax invoice with exception to the VAT amount. This does not need to be mentioned. Do note, a taxable person may not charge VAT as per profit margin scheme. If the VAT is charge with a full taxable amount and a tax invoice raised for it. I hope this video gives you a better understanding of the profit margin scheme. Hey everyone! you have reachedthe end of this video. Thank you all for the listening. If you like this content, please hit the like button and subscribe to our channel. If you like for us to talk about any specific any topics. Please let us know in the comments bellow. Hope to see you in the next video.