Date of supply

Date of supply is the date when VAT is calculated on a supply of goods or services. In UAE VAT, it is also called the time of supply or the tax point. It decides which tax period the output VAT belongs in, even if the customer pays later.

For UAE businesses, this date sits in Federal Decree-Law No. 8 of 2017. Article 25 sets the general rule. Article 26 covers special cases such as periodic invoices, vending machines, deemed supplies, and vouchers. If you issue invoices, take deposits, deliver goods, or bill monthly rent, the date of supply affects your VAT return more than the bank receipt date.

What is date of supply in simple terms?

Date of supply is the earliest date the law treats the sale as having happened for VAT. It is not always the day you deliver the goods, and it is not always the day cash arrives.

If you complete a job in March, issue the tax invoice in March, and get paid in April, the VAT usually belongs in March. If the customer pays a deposit in February before any work starts, that payment can pull VAT into February for the amount received.

This is why you should track three dates on every sale: the delivery or completion date, the tax invoice date, and the payment date. The earliest relevant date is usually the one that matters.

How does date of supply work in UAE VAT?

UAE VAT calculates tax on the date of supply. Under Article 25, that date is the earliest of several events, depending on whether you supply goods or services.

For goods, the law looks at when the goods are transferred under your supervision, or placed at the customer’s disposal if you do not supervise the transfer. If the goods need assembly or installation, the date can be when that work is finished. Imports use the import date under Customs Legislation. If goods are supplied on a returnable basis, such as sale or return, the date is when the customer accepts the goods, or no later than 12 months after transfer or disposal.

For services, the completion date is the usual delivery-type trigger.

In both cases, two commercial events can come first and set the date of supply earlier: the date you receive payment, and the date you issue a tax invoice.

You generally need to issue a tax invoice within 14 days of the date of supply. Issuing the invoice late does not move the VAT into a later period if delivery, completion, or payment has already set the date.

What is an example of date of supply for a UAE business?

A Dubai furniture shop agrees to sell a desk for AED 8,000 plus 5% VAT. It issues a tax invoice on 25 March, delivers the desk on 3 April, and receives payment on 10 April.

The date of supply is 25 March, because the invoice is the earliest of invoice, delivery, and payment. Output VAT of AED 400 belongs in the VAT period that includes 25 March, even though the cash arrives in April.

Now take an Abu Dhabi consultancy. A client pays AED 15,000 on 20 June as an advance. The work is finished on 15 July, and the tax invoice is issued on 18 July. The June payment can set a date of supply in June for the amount received. The business should not wait until July to account for VAT on that advance.

These examples also show why accrual accounting and VAT timing can differ. Revenue may follow the work. VAT follows the date of supply.

How does date of supply differ for goods and services?

Goods and services share the invoice and payment triggers. They differ on what counts as delivery.

Goods can move, sit in a warehouse, need installation, or arrive through customs. Article 25 uses transfer, disposal, installation, import, and, for returnable supplies, acceptance or a 12-month limit.

Services do not change hands in the same way. The usual non-invoice, non-payment date is when the service is completed. For a one-off design job, that is often the day you hand over the finished work. For a short project with a clear end, it is the completion date in the contract or the day the work is actually finished.

If you sell goods with installation, do not use the shipping date while installation is still open. The law can treat the date of supply as the day assembly or installation is completed, unless an invoice or payment came first.

What are the special date of supply rules for continuous supplies?

Article 26 applies when a contract has periodic payments or consecutive invoices. Common UAE examples are commercial rent, retainers, software subscriptions, and maintenance billed every month.

In those cases, the date of supply is the earliest of the tax invoice date, the payment due date shown on the tax invoice, the date payment is received, or the day one year has passed since the goods or services were provided.

This 12-month limit matters if invoicing is delayed. VAT can still become due even when no invoice has gone out.

Article 26 also covers a few other cases. For vending machines, the date of supply is when you collect the funds from the machine. For a voucher, it is the date of issuance or a later supply of the voucher. For a deemed supply, it is the date of supply, disposal, change of usage, or deregistration, as the case may be.

Why is date of supply important for UAE businesses?

Date of supply decides which VAT return includes the output VAT on a sale. Put the sale in the wrong period and the return will not match your invoices, even if the yearly totals look fine.

Advance payments are a common source of errors. A deposit is often a payment for VAT, so it can create a tax point before delivery. Recurring billing needs the same care. Rent and subscriptions follow Article 26, so the due date on the invoice can matter as much as the cash date.

Customers who recover input VAT also care about your dates. Their claim usually needs a valid tax invoice. If your invoice date, supply date, and VAT period do not line up, both sides can face questions in an FTA review.

Keeping invoice dates, delivery dates, and payment dates aligned in the books makes VAT filing simpler. Accounting software such as Naqood can help you store those dates on each invoice and review VAT by tax period before you file.

How should UAE businesses record invoice, delivery and payment dates?

Record the tax invoice date, the delivery or completion date, and each payment date on the sale. For imports, keep the customs import date. For goods on a returnable basis, record when the customer accepted the goods.

At period end, do not file from the bank feed alone. Check open invoices, advances received, goods delivered but not yet billed, and recurring invoices with due dates inside the period. If payment or delivery already happened, the VAT may belong in this return even if you still need to issue the invoice.

Issue tax invoices promptly, generally within 14 days of the date of supply. A late invoice does not change a tax point that has already arisen.

Frequently asked questions about Date of supply

What is the date of supply in UAE VAT?

It is the tax point. Under Article 25, VAT is calculated on the earliest relevant date, usually delivery or completion, the tax invoice date, or the date payment is received.

Does an advance payment change the date of supply?

Yes. Receiving payment, including a deposit or advance, can set the date of supply for the amount received, even if the goods are still with you or the service is not finished.

When is the date of supply for monthly rent or subscriptions?

Article 26 uses the earliest of the tax invoice date, the payment due date on that invoice, the date payment is received, or one year from when the goods or services were provided.

Do I account for VAT if the customer has not paid yet?

Often yes. If you have issued a tax invoice, delivered the goods, or completed the service, a date of supply can already exist. Unpaid invoices can still belong in the current VAT period.

When must I issue a tax invoice after the date of supply?

You generally must issue a tax invoice within 14 days of the date of supply. Issue it sooner if you can. A late invoice does not move the VAT into a later tax period.