When must a tax credit note be issued in the UAE?
Within 14 days. Article 62 of the VAT Decree-Law requires a registrant that charged more VAT than was due to issue a tax credit note within 14 days of the event that caused it. Article 61 lists those events: a cancelled supply, a change in its nature, a changed price, returned goods, or VAT charged in error.
Effect for both sides
Article 63 treats the VAT on the credit note as a reduction of output VAT for the supplier and a reduction of input VAT for the customer, in the period the customer receives it. Registrants inside the e-invoicing system must issue it as an electronic credit note.
Common construction cases
A certificate reduced after valuation, an omitted variation, or a contractor that invoiced the claimed amount rather than the certified amount. Each needs a credit note for the difference within 14 days.
How SupaJack Construct handles it
Credit notes go through an approval queue before they are issued, and approval posts the journal entry, including the VAT reversal, so the VAT return picks up the reduction automatically.
Related tools and guides
See the VAT guide for contractors, the VAT calculator, the payment certificate calculator, the retention calculator, finance and VAT in SupaJack Construct, the answer on whether a payment certificate triggers VAT and the meaning of e-invoicing.
Worked example
A contractor invoiced AED 500,000 plus AED 25,000 VAT. On 10 May the consultant reduces the certified value to AED 460,000. The contractor must issue a credit note for AED 40,000 plus AED 2,000 VAT by 24 May.
Questions people ask
What if VAT was undercharged?
Issue a new tax invoice for the additional VAT, under Article 62.
Is a credit note needed if the client never paid?
If the price changed, yes. Bad debt relief is a separate route.
Does the customer adjust input VAT?
Yes, in the period it receives the credit note.