How to Create a VAT Invoice in the UAE (2026 Guide)

What is a tax invoice in the UAE?

A tax invoice is the official document a VAT-registered business issues to record a taxable sale. It lets your customer recover input VAT and is what the FTA expects in an audit. Under UAE VAT law (Federal Decree-Law No. 8 of 2017 and its Executive Regulations), issuing a correct tax invoice is mandatory for VAT-registered sellers.

Full vs. simplified tax invoice

The dividing line is the AED 10,000 threshold and who your customer is:

• Simplified tax invoice — for sales to consumers (B2C), or any supply where the total including VAT is AED 10,000 or less. Fewer required fields.
• Full (standard) tax invoice — required for sales to other VAT-registered businesses (B2B), or any supply over AED 10,000. Needs the full set of fields, including your customer's details.

For most Instagram and WhatsApp sellers making everyday B2C sales under AED 10,000, a simplified tax invoice is usually enough.

What a UAE tax invoice must include

Every tax invoice (simplified or full) must show:

• The words "Tax Invoice", clearly displayed
• Your business name, address, and TRN
• A unique, sequential invoice number
• The date of issue
• A description of the goods or services
• The total amount and the VAT charged, in AED (5%)

A full tax invoice must also include:

• Your customer's name, address, and (if registered) their TRN
• The date of supply, if different from the issue date
• The unit price, quantity, and tax rate for each line item
• Any discount applied
• The total before VAT, the total VAT, and the gross total payable in AED
• If invoiced in a foreign currency, the AED equivalent and the exchange rate used

How to create a VAT invoice, step by step

1. Add your business details — name, address, and TRN. These appear on every invoice.
2. Add your customer — for a full invoice include their name, address and TRN; for a simplified invoice to a consumer this is optional.
3. Give it a unique, sequential number and a date.
4. List what you sold — with quantity and unit price for full invoices.
5. Apply 5% VAT — add 5% on the net amount and show it separately.
6. Show the totals in AED — net, VAT, and gross. If you billed in another currency, also show the AED equivalent and the exchange rate.
7. Label it "Tax Invoice", send it, and keep a copy.

How VAT is calculated (5%)

The UAE standard VAT rate is 5%, added on top of the net price and shown separately. Example on a AED 450 sale:

• Net: AED 450.00
• VAT (5%): AED 22.50
• Total: AED 472.50

Currency and rounding

Invoices should be in AED. If you sell in another currency, UAE rules still require you to show the VAT amount converted to AED using an approved exchange rate.

Common mistakes that cause FTA penalties

• Leaving off the words "Tax Invoice"
• A missing or incorrect TRN
• Using a simplified invoice when a full one is required (B2B or over AED 10,000)
• Invoice numbers that aren't unique or sequential
• No AED equivalent when invoicing in a foreign currency

The FTA treats invoice format errors as compliance issues even when the VAT itself was correct.

What about e-invoicing in 2026?

The UAE is rolling out mandatory e-invoicing in phases, beginning in July 2026. It initially focuses on B2B and B2G transactions and uses a structured format (XML/JSON) exchanged over the Peppol network through accredited service providers — not a simple PDF. For most small B2C sellers, a standard PDF tax invoice with the required fields is still the norm today, but it's worth watching the rollout as it expands.

Keep your records

UAE businesses generally need to keep VAT records, including invoices, for at least 5 years.

The easy way: create FTA-ready invoices on your phone

You don't need accounting software or an accountant. Fatura Go is a mobile app for UAE sellers: add your TRN once, and it creates tax invoices with sequential numbers, calculates 5% VAT automatically, and exports a clean PDF you can send by email or WhatsApp in seconds. It's designed to meet UAE FTA tax-invoice requirements — you stay in control and confirm the details. Fatura Go is free during launch.

Use Fatura Go free →Try the demo →

Frequently asked questions