What is a VAT Return?
VAT return filing 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 must provide.
What is VAT Return Filing in UAE?
VAT return filing in UAE is a systematic process. You need to document all your tax payments and state the total value of the supplies and purchases made.
While filing a return, you must comply with UAE VAT laws and provide accurate information. Any error can lead to penalties, eventually harming your reputation.
Therefore, you consult an experienced tax agent in the UAE for return filing. It will save you from avoidable penalties while reducing your workload.
How to Calculate VAT Liability?
When you purchase goods and services, it is mandatory to pay VAT. Businesses charge VAT on the sale of goods and services. VAT liability is the total difference between the VAT charged and the VAT incurred.
When the VAT charged is more than the VAT incurred, you need to pay the difference to FTA. However, if the situation is the opposite, FTA requires you to reimburse 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, you should regularly file a VAT return. Most businesses file returns within 28 days (about 4 weeks) before the tax period ends (period as defined by the FTA for every type of business)
There are two different standard tax periods for VAT return filing:
- Quarterly for businesses that have 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 rule exists to reduce the risk of tax evasion and enhance businesses’ monitoring.
Suppose the VAT return filing or payment due date falls on a weekend or a national holiday. In that case, the deadline to file a VAT return or make a payment becomes immediately following the business day.
How to file VAT Return in UAE?
For filing a VAT return in the UAE, one needs to access the VAT return form 201. The form is available on FTA’s e-service portal, and you can log in to the portal using your username and password.
You can find it on the navigation menu by choosing the VAT option. In the VAT option, you must select VAT 201- VAT Return and VAT 201- New VAT Return.
This is just the initial step to getting started with VAT return filing. You can also use NR Doshi’s VAT Calculator to calculate taxes. However, it is a long way to go. If you plan to do it yourself, you must be thorough with each aspect of VAT. If you are not, it may lead to errors and consume much time.
The other option is to opt for NR Doshi’s VAT return filing services. We will take care of your entire VAT return filing process. In addition to that, we can also help you with VAT calculations and accounting.
First, you need to add the TRN number and details of the taxable person. A TAAN number or Tax Agent Approval Number and TAN or Tax Agency Number are essential when tax agents submit returns on behalf of the company.
One also needs to provide the tax agent and agency details. 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
Now a window will pop up where you need to enter all the relevant information (collected through sales & other channels)
Then you need to provide information as to the VAT on expenses and other inputs. Moving forward, you must add the net VAT due along with the additional reporting details.
If you wish to focus on your core business 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. These steps will save time, and our professional approach will minimize the chances of errors.
Things to consider while filing a Tax return
- Fill up information for all mandatory fields
- Do not leave the amount fields empty. Enter ‘0’ if there is 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 must pay a penalty of AED 1000 for the first time and AED 2000 in case of a repeated failure within 24 months (about 2 years).
- 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.
- Suppose the legal representative for the taxable person fails to file a VAT return within the specified time. In that case, the legal representative will have to bear an AED 1000 penalty for the first failure. Subsequent failures will attract an AED 2000 fine (especially if it is repeated within 24 months (about 2 years) of the first offense).
Why Choose 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 ensure the timely filing of your VAT returns as per the due dates (while complying with the VAT laws in the UAE)
Apart from VAT return filing, we also provide VAT Registration, VAT Deregistration, VAT Training, and VAT Accounting services. Contact us for your compliance requirements.
Our Strength
- Our biggest strength is our reputation. With over 35 years of industry experience, we have exhaustive knowledge of the UAE market, how it functions while knowing how to deal with government authorities. Even if it is a new law or an update, we find ways to adapt & make life easier for our clients.
- One can freely rely on us while providing us with the opportunity to work with them. We maintain complete transparency and provide companies with continuous updates regarding work progress.
- Our VAT experts know the ins & outs of VAT. Working with multiple clients from diverse sectors has bestowed them with ample knowledge & experience. Therefore, you can trust NR Doshi & Partners to file VAT returns for your business.
FAQs: VAT Return Filing Service
I am a newly tax-registered business. Is there any relaxation for me in filing a VAT return?
As per the UAE VAT Laws, there is no such relaxation for filing a 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 the 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 the GIBAN number 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 cannot escape the overdue 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 have to pay hefty 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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