VAT was introduced in the UAE on 1st January 2018. Since then, 5% Value Added Tax is charged on most of the goods and services. The businesses collect tax from the customers and then remit it to the government. If you are a VAT registered business, then it is essential that you do VAT return filing.
What is a VAT Return?
VAT return or Tax Return is the document prepared and submitted by the taxable person at regular intervals providing information as to input tax recoverable, output tax due, and any other information that the taxable person is required to provide.
What is VAT Return Filing in UAE?
VAT return filing in UAE is a periodic process. You need to document all your tax payments and state the total value of the supplies and purchases made.
While filing a return, it is necessary that you remain compliant with the UAE VAT laws and provide accurate information. Any error therein can lead to penalties, which will eventually harm your reputation.
Therefore, it is advisable that you take the help of experienced tax agents in UAE for return filing. It will save you from avoidable penalties and also reduce your workload.
How to Calculate VAT Liability?
When you purchase goods and services, you need to pay VAT for the amount. When you sell goods and services to your customers, you charge customers with the VAT amount. The VAT liability is the total difference between the VAT charged and the VAT incurred.
When the VAT charged is more than VAT incurred, you need to pay the difference to FTA. However, if the situation is the opposite, FTA requires you to reimburse with the difference.
Therefore, it is essential that you keep track of the output tax payable and input tax recoverable. Our VAT return filing service will ensure the proper calculation and allow you to remain VAT compliant.
What is the deadline for VAT Return filing in UAE?
If you own a taxable business, then you should be filing a VAT return on a regular basis. It is a usual practice for businesses that most of them file returns within a period of twenty-eight days prior to the end date of the tax period defined by FTA for each business type.
There are two different standard tax periods:
- Quarterly for businesses which are having an annual turnover of less than AED 150 million
- Monthly for businesses which are having annual turnover of more than AED 150 million
However, it is up to FTA to define a tax period for a business. The authorities may define a different tax period for certain types of businesses. This is done to reduce the risk of tax evasion and also to enhance the monitoring over businesses.
Suppose the VAT return filing or VAT payment due date happens to fall on a weekend or a national holiday. In that case, the deadline to file a VAT return or making a payment becomes the immediately following business day.
The Easiest Way to File VAT Returns is to Outsource It
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How to file VAT Return in UAE?
For filing a VAT return, one needs to access the VAT return form 201. The form is available on FTA’s e-service portal. You can log in to the portal using your username and password.
It can be easily found on the navigation menu by choosing the VAT option. In the VAT option, you need to select VAT 201- VAT Return and select VAT 201- New VAT Return.
This is just the initial step to get started with VAT return filing. You can also take the benefit of our VAT Calculator to calculate taxes. However, it is a long way to go, and if you are planning to do it yourself, you must be thorough with each aspect of VAT. If you are not, it may lead to errors and consume a lot of time.
The other option is to take the benefit of VAT return filing services provided by N R Doshi and Partners. We will take care of your entire VAT returning filing process. In addition to that, if you want, we can also do VAT calculation and accounting along with that.
First, you need to add the TRN number and details of the taxable person. If we or any other tax agent submits the return on behalf of a company, TAAN number or Tax Agent Approval Number and TAN or Tax Agency Number is required. One also needs to give details of the tax agent and tax agency.
You also need to add VAT related details such as:
- VAT return period
- The tax year-end
- VAT return period reference number
- VAT return filing due date
Then comes the window where all the information related to VAT collected through sales and other outputs must be provided. Then you need to provide information as to the VAT on expense and other inputs. Moving forward, you require adding net VAT due along with the additional reporting details.
If you wish to focus on your core businesses processes, let us handle all the VAT related work. We will calculate the VAT by going through all your invoices and accounting records and file the return accordingly. This will not only save time, but our professional approach will also minimize the chances of errors.
Care to be taken while filing a Tax return
- Fill up information for all mandatory fields
- Do not leave the amount fields empty. Enter ‘0’ if there’s nothing to declare.
- Make sure to enter all the amounts in United Arab Emirates Dirham (AED) up to two decimal places
- Double-check the accuracy and completeness of the information provided to avoid fines and penalties.
Penalties related to VAT Return
- If the taxable person fails to submit the VAT return within the specified timeframe, then he has to pay a penalty of AED 1000 for the first time and AED 2000 in case of a repeated failure within 24 months.
- If the taxable person fails to settle Payable Tax as per the VAT return or Tax Assessment within the timeframe, then,
- 2% of the unpaid tax becomes due immediately
- 4% of the unpaid tax becomes due on the 7th day following the deadline for payment
- 1% daily penalty is charged on any amount that is still unpaid one calendar month following the deadline for payment, subject to a maximum of 300%.
- If the taxable person files an incorrect tax return, then,
- A fixed penalty of AED 3000 for the first time and AED 5000 in case of a repeated failure
- 50% if the taxable person fails to make a voluntary disclosure or makes the voluntary disclosure after he is notified of the tax audit and the tax authority starts the tax audit process or after being asked for information relating to the tax audit whichever takes place first
- 30% if the taxable person makes the voluntary disclosure after being notified of the tax audit and before the authority starts the tax audit
- 5% if the taxable person makes a voluntary disclosure before being notified of the tax audit by the authority
- If the legal representative for the taxable person fails to file a VAT return within the specified time, then the legal representative has to bear the penalties of AED 1000 for the first such failure and AED 2000 in case of repetition within 24 months.
File Accurate VAT Returns!
Remain VAT compliant with the support of N R Doshi and Partners
Why Choose N R Doshi and Partners?
N R Doshi and Partners has a team of expert VAT consultants to provide its clients with world-class VAT consulting services. We help you with the VAT return filing process and make sure that your VAT return is filed as per the due date and the requirements of VAT Laws in UAE.
Apart from VAT return filing, we also provide VAT Registration, VAT Deregistration, VAT Training, and VAT Accounting services. Get in touch with us for your compliance requirements.
- Our prime strength is our good reputation. One can freely rely on us while providing us the opportunity to work with them. We maintain complete transparency and provide companies with continuous updates regarding work progress.
- Our team members who take care of VAT services are thorough with each aspect of VAT. Working with multiple clients from various business sectors have made them familiar with the unique requirements. Therefore, it would be easier for us to perform VAT return filing for your business.
Testimonials: VAT Return Filing Service
FAQs: VAT Return Filing Service
I am a newly tax registered business. Is there any relaxation for me in filing VAT return?
As per the UAE VAT Laws, there is no such relaxation for filing VAT return. All VAT registered companies need to submit quarterly VAT returns on the 28th of the following month.
What are the different options available for payment of tax?
- One can settle Payable Tax using e-dirham or credit card (Visa and Master card only)
- Another option available is payment via e-debit. Here the payment is processed using retail or corporate banking channels of the taxpayer.
- One can also make a fund transfer via GIBAN number as provided by the FTA.
Can I file a VAT return without settling the payable tax?
Yes, one can file a VAT return without settling the payable tax, but he can not escape the late payment penalties.
Do I have to file my VAT return if I settle the payable tax on time?
UAE VAT Laws require a taxable person to file his tax return and settle the payable tax on time. If one fails to submit his VAT return on time, then he will be charged penalties.
I have come to know of mistakes in my tax return after submitting it to FTA. What should I do?
You need to file a Voluntary Disclosure in Voluntary Disclosure Form 211 to correct the mistakes if the net impact of VAT Payable or VAT Receivable is more than AED 10000. If such a mistake’s net impact is less than AED 10000, you are not required to submit the Voluntary Disclosure Form. You can correct such mistakes or omissions in the subsequent VAT return.
Is it possible to generate a VAT return file from my accounting software and file a VAT return with FTA?
Yes, one can generate a VAT return file and submit a VAT Return with the FTA if the software is certified by the FTA.
What is a tax period?
A tax period is a specified period for which tax payable shall be calculated and paid.
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