Odoo UAE VAT Configuration: Complete Tax Setup Guide

UAE VAT Overview

The UAE introduced 5% VAT on January 1, 2018. It is relatively simple compared to multi-slab systems like India's GST. Most goods and services are taxed at 5%, with specific categories zero-rated or exempt.

Tax Categories

Setup Steps

1. Company TRN

# Settings → Companies → Your Company
# Tax Registration Number (TRN): 100XXXXXXXXX (15 digits)
# This appears on all tax invoices

2. Tax Configuration

# Standard VAT 5% (Sales)
# Name: VAT 5% (Sales)
# Type: Sales
# Amount: 5%
# Tax Group: VAT
# Account: VAT Output (liability account)

# Standard VAT 5% (Purchases)
# Name: VAT 5% (Purchases)
# Type: Purchases
# Amount: 5%
# Tax Group: VAT
# Account: VAT Input (asset account)

# Zero-rated Sales
# Name: VAT 0% (Export)
# Type: Sales
# Amount: 0%
# Tax Group: VAT Zero-Rated

# Exempt
# Name: VAT Exempt
# Type: Sales
# Amount: 0%
# Tax Group: VAT Exempt

3. Fiscal Positions

# Standard (UAE → UAE): 5% VAT
# Export (UAE → Outside UAE): 0% (zero-rated)
# GCC (UAE → GCC country): Depends on GCC state implementation
# Free Zone → UAE: Standard 5%
# Designated Zone: Special treatment

# Configure fiscal position to auto-map taxes:
# Export position: maps "VAT 5% Sales" → "VAT 0% Export"

Tax Invoice Requirements

FTA requires these on every tax invoice:

• The words "Tax Invoice" clearly stated
• Supplier name, address, and TRN
• Customer name, address, and TRN (for B2B > AED 10,000)
• Sequential invoice number
• Invoice date and date of supply
• Description of goods/services
• Quantity and unit price
• Taxable amount (before VAT)
• VAT rate and VAT amount
• Total amount (including VAT)
• Currency (if not AED)

Reverse Charge

# Applies when importing services from outside UAE:
# Buyer accounts for both output and input VAT
# Net effect: zero (but must be reported)

# In Odoo:
# Create "Reverse Charge 5%" tax
# Type: Purchases
# Tax Computation: Group of Taxes
# Child taxes: +5% (output) and -5% (input)
# Net: 0% but both sides reported

VAT Return (Form 201)

# Filed quarterly or monthly depending on turnover
# Odoo → Accounting → Reports → Tax Report

# The report shows:
# Box 1: Standard rated supplies (5%)
# Box 2: Tax refunds provided
# Box 3: Zero-rated supplies
# Box 4: Exempt supplies
# Box 5: Total value of goods/services
# Box 6: Standard rated expenses
# Box 7: Total value of expenses
# Box 8: Total VAT due
# Box 9: Total recoverable VAT
# Box 10: Payable tax (8 minus 9)

Common UAE-Specific Issues

• AED rounding: VAT amounts round to 2 decimal places in AED
• TRN validation: Must be exactly 15 digits starting with 100
• B2B threshold: Customer TRN required on invoices > AED 10,000
• Credit notes: Must reference original invoice number
• Free zones: Designated vs non-designated zone treatment differs

DeployMonkey for UAE

Deploy Odoo for your UAE business on DeployMonkey. The AI agent configures VAT — 5% standard, zero-rated, exempt, reverse charge, and FTA-compliant invoicing. File-ready from day one.