Advance Payments and UAE VAT: When a Prepayment Doesn’t...

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2025-11-27 05:02:55 -

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Advance Payments and UAE VAT: When a Prepayment Doesn’t Necessarily Trigger Tax Liability

Introduction Many businesses across the UAE routinely apply Value Added Tax (VAT) to every advance payment received from a client, even if there has been no formally finalized or agreed upon rule regarding this. This routine habit of prematurely issuing Tax Invoices for every upfront payment even for non-specific retainers can put an unnecessary strain

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