VAT in Transactions

Zoho Books has a wide range of sales and purchase transactions. Each of these transactions are VAT-compliant i.e., different VAT treatments can be applied on items while creating transactions for them.

Sales Transactions

Purchase Transactions

Once you have set up the taxes, contacts and items in your Zoho Books account, you can start creating transactions. Transactions in Zoho Books are affected by the:

If you are a VAT registered person in the mainland, here’s how your transactions will incur VAT:


Sales Transactions in Mainland

Customer Tax Treatment Place of Supply Tax Rates
VAT Registered UAE Standard rate, Zero-rate, Exempt
Non VAT Registered UAE Standard rate, Zero-rate, Exempt
GCC VAT Registered UAE Standard rate, Zero-rate, Exempt
GCC VAT Registered GCC Out of scope
GCC Non VAT Registered UAE Standard rate, Zero-rate, Exempt, Out of scope
GCC Non VAT Registered GCC Out of scope
Non GCC - Zero-rate
VAT Registered - Designated Zones UAE Standard rate, Zero-rate, Exempt, Out of scope
Non VAT Registered - Designated Zones UAE Standard rate, Zero-rate, Exempt, Out of scope

Let us understand each of these scenarios in detail:

Case 1

Customer Tax Treatment Place of Supply Tax Rates
VAT Registered UAE Standard rate, Zero-rate, Exempt

Let’s say you sell goods or services to a VAT-registered customer in the UAE. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:

Case 2

Customer Tax Treatment Place of Supply Tax Rates
Non VAT Registered UAE Standard rate, Zero-rate, Exempt

Let’s say you sell goods or services to a customer who is in the UAE and is not registered for VAT. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:

Case 3

Customer Tax Treatment Place of Supply Tax Rates
GCC VAT Registered UAE Standard rate, Zero-rate, Exempt

Let’s say you sell goods or services to a customer who is registered for VAT in any one of the GCC member countries other than the UAE. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:

Case 4

Customer Tax Treatment Place of Supply Tax Rates
GCC VAT Registered GCC Out of scope

Let’s say you sell goods or services to a customer who is registered for VAT in any one of the GCC member countries other than the UAE. The supply takes place within the GCC.

In this case, the supply of goods or services is out of the scope of VAT.

Case 5

Customer Tax Treatment Place of Supply Tax Rates
GCC Non VAT Registered UAE Standard rate, Zero-rate, Exempt, Out of scope

Let’s say you sell goods or services to a customer who is in any one of the GCC member countries other than the UAE and is not registered for VAT. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:

Case 6

Customer Tax Treatment Place of Supply Tax Rates
GCC Non VAT Registered GCC Out of scope

Let’s say you sell goods or services to customer who is in any one of the GCC member countries other than the UAE and is not registered for VAT. The supply takes place within the GCC.

In this case, the supply of goods or services is out of the scope of VAT.

Case 7

Customer Tax Treatment Place of Supply Tax Rates
Non GCC - Zero-rate

Let’s say you sell goods or services to a customer who is outside any of the GCC member countries.

In this case, the supply of goods or services is out of the scope of VAT.

Case 8

Customer Tax Treatment Place of Supply Tax Rates
VAT Registered - Designated Zones UAE Standard rate, Zero-rate, Exempt, Out of scope

Let’s say you sell goods or services to a customer who is registered for VAT in a designated zone in the UAE. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:

Case 9

Customer Tax Treatment Place of Supply Tax Rates
Non VAT Registered - Designated Zones UAE Standard rate, Zero-rate, Exempt, Out of scope

Let’s say you sell goods or services to a customer who is in a designated zone in the UAE and is not registered for VAT. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:


Purchase Transactions in Mainland

Vendor Tax Treatment Place of Supply Tax Rates
VAT Registered UAE Standard rate, Zero-rate, Exempt, Out of scope
Non VAT Registered UAE Out of scope
GCC VAT Registered UAE Goods (Out of scope), Services (Reverse charge - Standard rate, Zero-rate)
GCC VAT Registered GCC GCC VAT/Exempt/Out of scope
GCC Non VAT Registered UAE Goods (Out of scope), Services (Reverse charge - Standard, Zero-rate)
GCC Non VAT Registered GCC Out of scope
Non GCC - Goods (Out of scope), Services (Reverse charge - Standard rate, Zero-rate)
VAT Registered - Designated Zones UAE Goods (Out of scope), Services (Standard rate, Zero-rate, Exempt, Out of scope)
Non VAT Registered - Designated Zones UAE Out of scope

Case 1

Vendor Tax Treatment Place of Supply Tax Rates
VAT Registered UAE Standard rate, Zero-rate, Exempt, Out of scope

Let’s say you buy goods or services from a VAT-registered vendor in the UAE. The supply takes place within the UAE.

In this case, the supply of goods or services can have any one of the following taxes:

Case 2

Vendor Tax Treatment Place of Supply Tax Rates
Non VAT Registered UAE Out of scope

Let’s say you buy goods or services from a vendor who is in the UAE and is not registered for VAT. The supply takes place within the UAE.

In this case, the supply of goods or services is out of the scope of VAT.

Case 3

Vendor Tax Treatment Place of Supply Tax Rates
GCC VAT Registered UAE Goods (Out of scope), Services (Reverse charge - Standard rate, Zero-rate)

Let’s say you buy goods or services from a vendor who is registered for VAT in any one of the GCC member countries other than the UAE. The supply takes place within the UAE.

In this case, the supply of goods is out of the scope of VAT. For services, reverse charge would be applicable along with the following taxes:

Case 4

Vendor Tax Treatment Place of Supply Tax Rates
GCC VAT Registered GCC GCC VAT/Exempt/Out of scope

Let’s say you buy goods or services from a vendor who is registered for VAT in any one of the GCC member countries other than the UAE. The supply takes place within the GCC.

In this case, the supply of goods or services is exempted from tax. However, if you want to apply tax on the supply, you would need to create a new tax in Zoho Books for the relevant GCC member country and apply it in the appropriate transaction. The transaction could also be out of the scope of VAT.

Case 5

Vendor Tax Treatment Place of Supply Tax Rates
GCC Non VAT Registered UAE Goods (Out of scope), Services (Reverse charge - Standard, Zero-rate)

Let’s say you buy goods or services from a vendor who is in any one of the GCC member countries other than the UAE and is not registered for VAT in that particular country. The supply takes place within the UAE.

In this case, the supply of goods is out of the scope of VAT. For services, reverse charge would be applicable along with the following taxes:

Case 6

Vendor Tax Treatment Place of Supply Tax Rates
GCC Non VAT Registered GCC Out of scope

Let’s say you buy goods or services from a vendor who is in any one of the GCC member countries other than the UAE and is not registered for VAT in that particular country. The supply takes place within the GCC.

In this case, the supply of goods or services is out of the scope of VAT.

Case 7

Vendor Tax Treatment Place of Supply Tax Rates
Non GCC - Goods (Out of scope), Services (Reverse charge - Standard rate, Zero-rate)

Let’s say you buy goods or services from a vendor who is outside any of the GCC member countries.

In this case, the supply of goods is out of the scope of VAT. For services, reverse charge would be applicable along with the following taxes:

Case 8

Vendor Tax Treatment Place of Supply Tax Rates
VAT Registered - Designated Zones UAE Goods (Out of scope), Services (Standard rate, Zero-rate, Exempt, Out of scope)

Let’s say you buy goods or services from a VAT-registered vendor in a designated zone in the UAE. The supply takes place within the UAE.

In this case, the supply of goods is out of the scope of VAT. For services, the supply can have any one of the following taxes:

Case 9

Vendor Tax Treatment Place of Supply Tax Rates
Non VAT Registered - Designated Zones UAE Out of scope

Let’s say you buy goods or services from a vendor who is in a designated zone in the UAE and is not registered for VAT. The supply takes place within the UAE.

In this case, the supply of goods or services is out of the scope of VAT.


Taxes in Transactions

Let’s learn how VAT is applied in different transactions. Take the case of an invoice.

When you select an item to be invoiced, the default tax rate that you have set for the item will be applied to it.

Item Details

A comprehensive Tax Summary Report will be displayed at the end, which is a requirement by the FTA.

Tax Summary Report


Next:
Designated Zones >

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