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VAT RETURN FILING IN UAE

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VAT Return Filing in UAE

In the UAE, VAT is compulsory for all business entities with an annual turnover of Dh 375,000 or more. Filing of VAT is necessary for those who have registered for VAT. VAT return filing is the official tax report a business firm should submit. The business entities should submit VAT return filing to the Federal Tax Authority before the due date. So, every business owner and investor needs to have a clear knowledge of VAT return filing as it will give a complete idea about every operational activity of the business. VAT return filing will help your business avoid future financial loss and will provide a legal assurance for your business.

VAT return filing is the submission of the required details of the sales and expenses related to VAT during the specific tax period. The details should be entered in their specific form. By filing the VAT returns a business firm can understand the amount that should be paid as VAT and can reclaim and refund. The businesses should file VAT returns through the online portal of the Federal Tax Authority (FTA). The taxpayer is required to enter the values of output VAT, Input VAT, sales, expense etc.

Let’s look into the VAT Return Filing process in detail;

Process of VAT return filing in UAE

  1. Obtain an account with the Federal Tax Authority

Any business firm in the UAE which has registered for VAT should possess an account with the Federal Tax Authority. Hiring external help may need in this situation. A tax agent or a VAT return filing service provider can help you out with this. They can assist you with the process and make sure the data you provided is error-free.

  1. Provide the details of the taxable person for vat returns in UAE

After creating the Federal Tax Authority account, the next step is to provide the required details, the name of the firm, address, Tax registration number etc. If you have consulted any VAT filing service provider in UAE, they will do the job of providing the details. It is essential to ensure the data given belongs to that particular tax filing period.

  1. Provide inputs of VAT sales, expenses etc.

All the necessary information regarding the VAT sales and expenses in the financial year should be provided in the form. Details like zero-rated service and exempt service should mention.

  1. Enter the calculations of Net VAT due

The VAT due amount will be normally higher compared to the recoverable amount that has to be paid. If the recoverable amount is higher than the Net VAT due, the amount can be refunded back. The calculation we provide to the Federal Tax Authority represents the payable tax amount of a business entity in every financial year.

  1. Submit the declaration for vat returns in UAE

A declaration about the details provided should be entered as the last step of the process.

These are the steps to filing VAT returns in UAE. The major factor that needs to be considered here is to provide accurate information. Inaccuracy in information will cause you to pay a huge amount as a fine. It is always better to consider a VAT filing service provider in UAE to prevent these fines and penalties caused by your ignorance of the procedure or carelessness.

The possible errors that can happen during the VAT return filing in UAE

  • Failure of submitting the VAT return filing on time
  • Incorrect input claims about the expenses
  • Invalid tax invoice
  • Improper records
  • Improper adjustments in bad-debts
  • Wrong adjustments in providing input taxes
  • Voluntarily disclose errors in the tax return

Consequences of late or improper VAT return filing

  • A penalty of AED 1000 will be charged to the registrant who fails to file the UAE VAT return on time. And if the person repeats the offence within the next 24 months, then he is liable to pay a penalty of AED 2000.
  • In the UAE, an incorrect filing of VAT return can cause a fixed penalty of AED 3000 for the first time and AED 5000 for the second time
  • A percentage-based penalty will be charged on the amount unpaid due to the error
  • Failure to voluntary disclose errors in the tax return will cause a fixed penalty of AED 3000 for the first time and AED 5000 for the second time.

The assistance of MAATS in VAT return filing

VAT return filing in Dubai is a complex process that requires careful dealing. Hiring a professional VAT filing service provider is always essential to avoid the mistakes that can cause penalties. Getting information about the tax payment period and the requirements of the process is inevitable. Our team at MAATS provides complete services regarding VAT & VAT returns in UAE. We compile the information for filing the VAT return. We prepare for the VAT return filing on behalf of the company as per the provisions of UAE VAT law. We ensure that the VAT returns in UAE are filed on time in each tax period.

Frequently Asked Questions

Missing the deadline can result in penalties. The FTA imposes fines for late filing, which can be up to AED 1,000 for the first time and AED 2,000 for each subsequent delay.
Yes, you can amend a VAT return within 20 business days from the original filing date if you realize there were errors or omissions.
Yes, you must still file a VAT return even if you had no taxable transactions. This is known as filing a “nil return.”
If you overpay VAT, the excess amount can either be refunded or carried forward to offset future VAT liabilities.
No, you can only file one VAT return for a specific period. If you missed a previous period, you would need to file the returns separately.
Output VAT is the VAT you collect on sales, while input VAT is the VAT you pay on purchases. Your VAT return will show the difference between the two.
Yes, VAT consultants can help businesses prepare and file VAT returns, ensuring compliance with the FTA’s regulations and helping to optimize VAT recovery.
If your VAT return is flagged for audit, ensure that all your records are accurate and complete. You may need to provide additional documentation to the FTA during the audit process.
VAT return filing is generally the same for businesses in free zones, but businesses operating in certain free zones may have specific VAT exemptions or rules.
You should keep all invoices, receipts, contracts, and other supporting documentation to justify the VAT reported in your return, as the FTA may request them during audits.
If a mistake is found within 20 business days, you can amend your VAT return by submitting a corrected return through the FTA’s portal.