Definition

A Tax Credit Note is a VAT document issued by a supplier to correct or reduce the value of a previously issued tax invoice, usually when goods are returned or discounts are applied.

Key points

• Must reference the original tax invoice number.
• Must show supplier TRN, customer details, and VAT adjustment.
• Reduces the supplier’s output VAT in the next VAT return.

Practical example

A supplier issues a credit note for AED 5,000 + 5% VAT after a customer returns defective goods. The supplier adjusts output VAT in the next filing.

Why it matters

Tax credit notes maintain VAT accuracy and are mandatory for lawful invoice corrections.