Tax overview
What the Tax module does, who uses it and how UAE VAT flows from documents to a filed return.
What Tax does
Tax turns the VAT on your posted invoices, credit notes and vendor bills into a VAT return that you prepare, check against the ledger, have approved by other people, and submit. It also holds the rules that decide which tax code a sale or purchase carries, the company's tax registrations (TRN), and workpapers for corporate tax and withholding.
The module is built for the GCC. For the UAE, the usual setup is 5 % VAT with a quarterly or monthly return to the Federal Tax Authority (FTA). Other GCC countries (AE, SA, BH, OM, QA, KW) are supported; other regions are not.
Who uses it
- Accountants prepare returns and propose adjustments.
- Controllers review, approve and submit returns, and post adjustments.
- Tax administrators keep the registrations, authorities, rules, return forms and country packages.
- Everyone with Finance access can read the tax register and reports.
Key ideas
| Term | Meaning |
|---|---|
| Tax code | A named tax such as SR (standard rated 5 %), ZR (zero rated), EX (exempt), OS (out of scope), RC (reverse charge), IM (import) or BL (blocked, not recoverable). Rates are dated. |
| Treatment | Standard rated, zero rated, exempt, out of scope or reverse charge. They are kept apart on the return even when the rate is 0 %. |
| Registration | Your TRN for a country and tax, with dates. The UAE TRN has 15 digits. |
| Return form | The layout of a return: its boxes and what fills each one. |
| Determination rule | A condition that gives a tax code to a supply (for example, ship-to country not AE gives ZR). |
| Fiscal position | A customer or supplier setting that swaps one tax or account for another. |
| Adjustment | A tax entry that does not come from an invoice: bad-debt relief, its recovery, and import VAT. |
How the return is built
You never type the boxes. Prepare reads every posted taxable line in the period, assigns it to a box by treatment, place of supply and side (sale or purchase), and totals it. Credit notes reduce the boxes. Reverse-charge purchases count both as output and as recoverable input, so the net effect is nil. Prepare also compares the return with the tax accounts in the ledger; an unexplained difference blocks approval.
Example: output tax 50 on an invoice of 1,000, minus 5 on a credit note of 100, plus 50 on a reverse-charge bill of 1,000. Output 95. Recoverable input 20 on a bill of 400 plus 50 reverse-charge input: 70. Payable 25.00 AED.
Four-eyes control
Nobody decides their own work. Masters (registrations, rules, forms and so on) are activated by someone other than the person who prepared them. A return is prepared by one person, reviewed by another, approved by a third. Adjustments are posted by someone other than the proposer. Approved and submitted returns are never edited; you amend them with a linked new version.
How Tax connects to other modules
- Finance / Accounting keeps the tax codes and rates (Finance > Configuration > Taxes) and fiscal positions; it posts the VAT on invoices and bills. Tax reads those postings.
- Sales and Purchases get their tax code from the line, the product, the fiscal position, or the determination rules.
- Approvals are done inside Tax by permission, not a separate approval inbox.
Not available yet
Excise tax, connectors to file with the FTA or ZATCA, group returns across currencies and shipped country content (forms, rules and sources are entered by your tax specialist) are not available. Submit records the act and the reference only.
Next: Getting started.