ERPNext has tailored its features for UAE: A Comprehensive Guide

VAT/EXCISE Tax Implementation for UAE

1. Tax Registration Number (TRN) Setup:
   • For Customers: Input the Tax Registration Number in the ‘Tax ID’ field under the Customer section.
   • For Companies: The same can be done in the Company section.
   • For Suppliers: Ensure the TRN is set in the Supplier section.
2. Tax Code Configuration for Products:
   • In the item master, there’s a provision to set up the tax code. Once set, this code will automatically be fetched in the sales or purchase invoice when the item is selected.
3. Default Tax Templates:
   • ERPNext offers default tax templates for VAT (5%, zero, exempted) and excise (50%, 100%). However, businesses also have the flexibility to create custom tax templates as per their requirements.
4. Creating VAT-Compliant Invoices:
   • Ensure the TRN for Customers and Suppliers is correctly set.
   • Ensure the tax code for the item is set.
   • Choose the appropriate tax template based on the transaction type.
   • Once all details are verified, save and submit the invoice.
5. Printing Tax Invoices:
   • ERPNext offers two default print formats:
     • Simplified Tax Invoice
     • Detailed Tax Invoice
6. VAT Account Setup:
   • Businesses need to select the appropriate accounts that will be used for creating VAT invoices.
7. UAE VAT 201 Report:
   • To generate this report, navigate to Accounting > Value-Added Tax (VAT UAE) > UAE VAT 201 or simply use the search function.
   • For printing, select Menu > Print.
   Note: Ensure the following for accurate report calculations:
   • Correct Emirate selection in Company Address and Sales Invoice.
   • Items that are Zero Rated or Exempted should be appropriately marked in the item master.
   • All VAT accounts should be selected in the UAE VAT Settings.

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UAE Regional Fields

ERPNext has introduced specific fields in its standard DocTypes to ensure regional compliance in the UAE.

1. Item Master:
   • Is Zero Rated: Check this for items that fall under the Zero Rated category.
   • Is Exempt: Check this for items that are exempted from tax.
2. Sales Invoice:
   • VAT Emirate: This field allows businesses to select the Emirate of Place of Supply.
   • Refund Provided to Tourists: Input the tax amount refunded to tourists here.
3. Purchase Invoice:
   • Recoverable Standard Rated Expense: Input the tax amount that can be claimed back.
   • Reverse Charge Applicable: If applicable, select ‘Y’. This will nullify the taxes and create a reverse GL Entry.
   • Recoverable Reverse Charge (Percentage): Input the percentage of the Tax Paid under Reverse Charge that can be reclaimed.

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In conclusion, ERPNext’s comprehensive suite of features tailored for the UAE ensures that businesses can seamlessly integrate their operations with the local regulatory framework. Whether it’s VAT implementation, tax invoice generation, or regional field compliance, ERPNext has got it all covered. Businesses in the UAE can now focus on their core operations, knowing that their ERP system is fully compliant with local regulations.

Do you want to implement ERPNext for your business? CraftInteractive is ERPNext partner in Dubai, Abu Dhabi UAE. Mail us at hello@craftinteractive.ae or book a demo. Our experts can help you implement strategies to retain customers while also acquiring new ones. ERP for Retails in Dubai, Abu Dhabi UAE.