Key Differences
Agent (Disclosed)
Acts on behalf of principal. VAT only on commission/fee. Customer knows who the real supplier is. Invoice from principal to customer. Agent invoices commission separately.
Principal
Acts in own name. VAT on full sale price. Customer deals with you directly. You issue invoice to customer. You bear credit risk. Higher revenue = higher VAT liability.
⚠️ Common Pitfalls
Online platforms: agent or principal? Travel agents: disclosed vs undisclosed. Real estate brokers: commission-based agent. Recruitment agencies: agent for employer. Freight forwarders: often act as principal despite name. Substance over form — NBR looks at the contractual reality.