Tax Credit Note Article (59)

What is Tax Credit Note?

A Tax Credit Note (CN) is a written or electronic document in which the occurrence of any amendment to a Taxable Supply that reduces or cancels it is recorded and the details including it.

Particulars of Tax Credit Note:

(1) The words “CN” clearly displayed on the invoice.
(2) The name, address, and Tax Registration Number of the Registrant making the supply and the Recipient where he is a Registrant.
(3) The date of issuing the CN, the correct amount relating to supply,
(4) The difference between those two amounts and the Tax charged that relates to that difference in AED.
(5) Explanation of the circumstances giving rise to the issuing of the CN.
(6) Information sufficient to identify the supply to which the CN relates

Relief from Issuing Tax Credit Notes:

Where, on application by a Taxable Person, the Authority consider that sufficient records available to establish the particulars of any supply or class of supplies, and that it would be impractical to require that a CN be issued by the Taxable Person, the Authority may determine any of the following, subject to any conditions that the Authority may consider necessary

  • Anyone or more of the particulars shall not be contained on a Tax Credit Note.
  • A Tax Credit Note is not required to be issued

Note: if the approval has been given by authorities, approval may withdraw at any time if they feel the above condition has been not met.

Electronic Tax Credit Note:

If the taxable person issue credit notes electronically then:

  • The Taxable Person must able to storing a copy of the electronic Tax Invoice to follow the records keeping requirement, and integrity of the content of the electronic credit note should be guaranteed

If The Recipient Issue Credit Notes On Behalf Of Supplier:

The documents shall be treated as it has been issued by the supplier if the following conditions met.

  • The Recipient is a Registrant
  • The supplier and the Recipient agree in writing that the supplier shall not issue a CN in respect of the supply of goods or services.
  • Tax credit notes contain all particulars and the word CN is clearly displayed.

If The Agent Made A Supply On Behalf Of Principal:

If an agent who is a Registrant makes a supply of Goods or Services on behalf of the principal of that agent, that agent may issue a CN in relation to that supply he made, the principal shall not issue a CN.

 

Read more about Administrative Penalties for Violations of Tax Laws in the UAE