VAT (Value Added Tax)
As most of you know that VAT is implemented in the UAE starting January 2018 and it applies to transactions on our website too. As transactions on Yallabargain.com mainly involve used / pre-owned and unique products, various scenarios may arise with respect to VAT implementation.
1. VAT will not be levied on a transaction involving individuals when buying and selling new or used personal goods if it is a one-off economic activity.
2. If a business or individuals sell used goods or items on a regular basis on Yallabargain.com then they need to register for VAT if you sell over 375,000 AED in a year and a 5% VAT is charged on the profit you make. If you sell less than 375,000 then VAT is not charged if they are not registered.
For example, an individual or business purchases a used Tommy Hilfiger watch from another individual or business at 500 AED and wants to sell it for 600 AED. The profit is 600 AED minus 500 AED which is 100 AED then as per UAE VAT regulations; you are liable to collect 5% VAT on your profit of 100 AED which is 5 AED. Hence, your item should be priced / listed at 605 AED (600 + 5 AED) and you will have to pay 5 AED in taxes at the end of the year.
3. If an individual or business sells new products for profit on the website then no VAT is charged if they sell less than 375,000 AED in a year. If they sell over 375,000 AED then 5% VAT is charged on the selling price.
4. If an individual or business rents out their goods for profit on Yallabargain.com then no VAT is charged if their rental transactions value is less than 375,000 AED in a year. If their total rental transactions value is over 375,000 AED, then 5% VAT is charged on the rental amount. No VAT is charged on rental deposits on rental orders.
For example, an individual or business rents their Yamaha Keyboard to another individual or business at 100 AED per day for a period of 5 days on Yallabargain.com. The total rental amount from this transaction would be 500 AED; you are liable to collect 5% VAT on this transaction which is 25 AED. Hence, your item rental price per day when listing should be at 105 AED (100 + 5 AED), hence and you will have to pay 25 AED in taxes at the end of the year on this transaction.
According Article 29 of Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree Law No. 8 of 2017 on VAT, a person may levy VAT on profit margin on compliance of the following conditions.
1) Item which is being sold shall be movable and shall suitable for re use either with or with our further repairs/refurbishing.
2) Item shall either be procured from a non-registrant or another taxable person who levies VAT on profit margin.
3) Item shall either also be an item on which Input VAT was not recovered in accordance with Article 53 of this regulations.
4) The price displayed shall be inclusive of VAT on profit margin, if applicable.
5) If the seller is registrant, he shall keep all required records as per UAE VAT and TAX laws.
6) If tax has been charged on profit margin, the seller has to give the following in the Tax Invoice,
a) Note stating that tax has been charged with reference to Profit margin b) All other required details of a Tax Invoice VAT are applicable to all orders on the website.
Products can be listed on the website by both registered individuals and businesses. The seller / owner must list their product or item inclusive VAT on the website as above mentioned. VAT would be collected and implemented on the website as per the UAE rules.
Seller / Owner listing with us agree that tax invoices will be raised by them and uploaded from their account with the Order ID which will be accessible by the buyer/renter.
Yallabargain.com will raise a separate tax invoice for delivery to the buyer/renter. A tax invoice for the commission will be issued by YallaBargain.com to the seller/owner.
Buyers/Renters may get multiple invoices within an order if the products have been purchased or rented from different suppliers.
For more information on the tax invoice breakup, please refer to the templates below.
Invoice Templates for Sales Order with Examples
Yalla Bargain LLC to Seller
Templates for Rental Orders with Examples
Note that in the below invoice templates for rental orders, the rental duration of each item will be calculated per day. The price per unit will be calculated on a daily basis for rental orders only. Rental deposit would not be a part of the invoice is it’s returned back to the renter prior to generating invoice.
Yalla Bargain LLC to Owner
Delivery Invoice Template from YallaBargain.com to the Buyer/Renter
For any more clarifications or questions on VAT implementation on Yallabargain.com, please send an email to email@example.com