Does a payment certificate trigger VAT in the UAE?
No. The FTA's real estate VAT guide states that certification of a construction project does not trigger the date of supply for VAT. VAT is due at the earliest of a tax invoice, the payment due date shown on it, or receipt of payment. Because a certificate often sets a payment due date, it frequently leads to the trigger soon after.
The continuous-supply rule
Construction contracts with advances, stage payments and retention fall under Article 26 of the VAT Decree-Law. The date of supply is the earliest of invoice, due date or payment, and if none happens, VAT is triggered 12 months after the work was provided.
How SupaJack Construct uses the certificate
The certificate is the gate for the invoice, not the VAT trigger. SupaJack Construct refuses to raise a progress invoice until a certificate exists, then charges 5% VAT on the certified value less any advance recovery, and the invoice is what starts the VAT date.
Related tools and guides
See the VAT guide for contractors, the interim payments guide, the payment certificate calculator, the retention calculator, the advance recovery calculator and the meaning of retention.
Worked example
A certificate for AED 1,056,000 is issued on 28 May and the contractor invoices on 2 June. VAT is due by reference to 2 June, the invoice date, not 28 May.
Questions people ask
Does the payment due date matter?
Yes, if it falls before the invoice is issued or payment is received.
What if the contractor never invoices?
VAT is triggered 12 months after the work was provided.
Is a certificate a tax invoice?
No; the tax invoice is a separate document.