The UAE introduced VAT at 5% in January 2018. If you are issuing a proforma invoice in the UAE, you need to understand when VAT applies, when to include your Tax Registration Number (TRN), and how the rules differ between mainland companies and free zone entities.
Is a proforma invoice a VAT tax invoice in the UAE?
No. Under UAE Federal Decree-Law No. 8 of 2017 on VAT, a proforma invoice is not a tax invoice. It does not trigger a VAT liability, and the recipient cannot use it to claim input VAT. A proper VAT tax invoice must be issued after the supply of goods or services.
However, a proforma invoice may show an estimated VAT amount so the buyer can plan their cash flow and input tax recovery.
Required fields on a UAE proforma invoice
| Field | Example | Notes |
|---|---|---|
| Document title | PROFORMA INVOICE — Not a Tax Invoice | Must be clearly labeled |
| Seller TRN | 100123456700003 | Include if VAT registered (TRN is 15 digits) |
| Seller name and address | Dubai Trading LLC, DAFZA, Dubai, UAE | Include emirate and free zone if applicable |
| Buyer TRN | 100987654300001 | Include if buyer is VAT-registered — needed for their input tax records |
| Proforma number and date | PI-2026-0042 / 03 Jul 2026 | Sequential, separate from tax invoice series |
| Validity date | 03 Aug 2026 | Quote expiry |
| Description of goods/services | Laptop — Dell Inspiron 15, Core i7 | Specific description required |
| Quantity, unit price, line total | 10 units × AED 3,500 = AED 35,000 | In AED for domestic; USD for export |
| Estimated VAT (5%) | AED 1,750.00 | Label as "estimated" — not a VAT charge |
| Total (incl. VAT) | AED 36,750.00 | Label as estimate |
| Payment terms | 50% advance + 50% on delivery | Include bank details for UAE local transfer or SWIFT |
Free zone vs mainland UAE: key differences
The UAE has more than 40 free zones (JAFZA, DAFZ, Meydan, DIFC, etc.). VAT treatment differs depending on where the seller and buyer are located:
| Transaction | VAT treatment |
|---|---|
| Free zone company → UAE mainland company | Standard-rated (5% VAT applies) — treated as import into UAE mainland |
| Free zone company → Another free zone company | Zero-rated or outside scope — check specific zone rules |
| UAE mainland company → Export outside UAE | Zero-rated (0% VAT on exports) |
| UAE mainland company → UAE mainland company | Standard-rated (5% VAT if supply is taxable) |
If you are a free zone entity issuing a proforma to a mainland buyer, include the VAT estimate and state clearly: "Goods moving into UAE mainland are subject to 5% VAT on import at the mainland entry point."
Currency on UAE proforma invoices
The UAE Dirham (AED) is pegged to the USD at AED 3.6725. For domestic UAE transactions, use AED. For international trade, USD is widely accepted and the exchange is straightforward. You may quote in both currencies on the same proforma for clarity.
Download a free UAE proforma invoice template
Our UAE proforma invoice template includes TRN field, estimated VAT breakdown, AED currency, and free zone address support. Also available in the full template gallery. Use the free online generator to create a branded UAE proforma PDF in under two minutes.
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