Overview
VAT Assistant is an AI-powered feature that helps company Admins and Accountants to determine the VAT recoverability of the corporate's expenses, based on the UAE VAT input tax law.
It automates VAT analysis across multiple criteria and provides clear reasoning for its decisions.
What VAT Assistant Does?
The VAT Assistant automatically analyzes receipts and expenses to assess whether the VAT can be recovered. The analysis is based on:
Nature of your business
Expense category
Team
Memo
Receipt details
Each transaction is assigned a VAT Classification with accompanying AI-generated reasoning and references to UAE tax law.
VAT Assistant Classification:
Classification | What this means? |
✅ Input Allowed | Input tax is recoverable as per Article 53, provided a valid tax invoice is available. |
🧩 Input Allowed Conditionally | Additional business context is required to determine whether input tax can be recovered. |
❌ Input Not Allowed | Input tax is blocked under Article 53 due to non-business, entertainment, or personal use. |
🔁 Reverse Charge | Reverse Charge applies to this transaction. This means you need to report the VAT yourself instead of the supplier charging it. You can reclaim the VAT if the expense is business-related and a valid corporate tax invoice is available. |
🌍 Out of Scope | No UAE VAT applies. The transaction is outside UAE VAT jurisdiction and no VAT reporting is required. |
🚫 VAT Exempt | No VAT is charged as this is an exempt supply (e.g., airline expenses, taxi fares). No input tax can be reclaimed. |
⌛ Insight Not Ready | VAT analysis is pending or in progress for these transactions. |
How It Works:
Where to View: Results are shown in the Accounting field section of each transaction.
Single-Receipt Only: Analysis is available only for transactions with one receipt.
Regenerate Option: If key fields (like category, memo, or receipt) change after analysis, you (Admin or Accountant) can regenerate the results.
Manual Trigger: Admin or Accountant can trigger analysis for older transactions.
FAQ:
Q: Can I rely solely on VAT Assistant for VAT filing?
No. The Assistant provides AI-generated recommendations, not legal tax advice. Always verify with a certified Tax Agent.
Q: What does “Insights Not Ready” mean, and what happens if I update a transaction after analysis?
If analysis hasn’t been run yet or if you update the transaction (such as changing the category, memo, or receipt, or when a transaction has multiple receipts), the status will show “Insights Not Ready.” In this case, a Regenerate button will appear. Clicking it will re-run the analysis and update the VAT insights.
⚠️ Disclaimer: The insights or information provided by Alaan do not constitute tax advice in any manner, and that you must consult a UAE registered Tax Agent to fulfill your tax obligations. Alaan AI may make mistakes. Please double check responses.
🚀 Note: We’re actively improving this feature, and your feedback helps shape future enhancements. Please share your feedback with our product team at [email protected].
If you’d like to enable VAT Assistant for your UAE corporate account, please contact your account manager.