VAT Return Filing in UAE

VAT Return Filing

VAT Return Filing in UAE

VAT Return Filing is mandatory since it was introduced in the UAE on 1st January 2018. Every eligible business in the UAE has to file VAT and remit the 5 % VAT charged on different goods and services. Companies collect the VAT from the consumers by selling goods and services with the VAT included in the final price, and the same has to be remitted to the UAE government. A business should comply with VAT rules and regulations to avoid penalties and correctly complete the VAT return filing process.

What is a VAT Return in UAE?

In simple words, the VAT return or Tax Return is the document that includes all the details about the supplies and purchases made during a particular financial period and the VAT liability of the taxable business.

What is VAT Filing in UAE?

Taxable businesses in the UAE have to file the VAT Return and comply with the rules laid down by the FTA. The VAT Return filing has to be done periodically- usually within 28 days of the tax period, which is specified for businesses with a particular amount of Turnover.

For example, companies with an annual turnover below AED 150 million will file the VAT Return every quarter. While companies with a yearly turnover exceeding AED 150 million have to file VAT returns monthly. Whichever category your business falls into, it's mandatory to follow the VAT Return filing rules; otherwise, you must pay the penalty.

If the correct VAT records are not furnished correctly, the inaccurate VAT filing in UAE attracts a heavy fine. Not only it's a financial loss, but also negatively impacts the company's reputation.

Hire a VAT expert for a timely and accurate VAT filing in UAE.

How is the VAT Liability calculated?

When a company purchases goods and services, it directly pays the VAT. But when it further sells them to their end consumers, it charges the customers the VAT amount. When collected from the consumers, the tax needs to be remitted to the government by filing the VAT Returns.

Businesses eligible for VAT Registration are required to charge VAT on the taxable goods and services they sell. They need to report to the government the details about the VAT they have charged and the amount paid to the government. If the VAT charged is more than the VAT paid to the government, then the VAT Liability is the difference between the VAT charged and the VAT paid.

In simple words, if they have charged more VAT amount than they have paid, then they need to pay the total difference to the government. On the contrary, if they have paid more than what they have charged to the consumers, they can reclaim the difference by duly filing the VAT Return.

Businesses should maintain the VAT records accurately to avoid financial losses and penalties. Our VAT professionals keep track of the due database and help you furnish and prepare all the necessary documents required for VAT filing.

What is the deadline in the UAE for VAT filing in UAE?

The UAE Government has set different deadlines for VAT Filing in UAE for businesses with different turnovers. As per the FTA rules, 28 days before the tax period is the deadline to file for the VAT Return.

Two standard tax periods businesses in the UAE are required to be followed:

If the annual Turnover is less than AED 150 million, the time slab is quarterly basis.

If the annual Turnover of the taxable business is more than AED 150 million, then the VAT returns need to be filed monthly.

FTA can define different tax periods for different types of businesses. It facilitates easy monitoring and prevents tax evasion.

If the due date for the VAT Filing coincides with a national holiday or a weekend, then the following business day becomes the last due date for VAT Return filing.

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What is the process for VAT Return Filing in UAE?

To file the VAT return, one must visit the UAE government's official portal and log in with the username and password. Then access the VAT form 201. The navigation menu displays the VAT option, and then you need to click on VAT 201-VAT Return and go to the VAT 201- New VAT Return option.

One can easily find it 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. It is the first step in filing the VAT return. Suppose you find difficulty in navigating the site and in the VAT Return filing. In that case, you can always depend on VAT Certified consultants who are acquainted with the process and will help you file with the VAT Return filing process.

If you are attempting to file the vat return yourself, you should be acquainted with every aspect of VAT to avoid errors and, most importantly, avoid paying any penalties. So, if you are not well-versed with the process and don't have that much time to follow the due process of remitting the tax, you can hire certified VAT Consultants.

UAE VAT Consultants offer complete VAT-related services- Vat Filing, VAT Accounting, VAT registration, and other arrays of services that help your business to be VAT Compliant.

It is noteworthy that if the company submits the VAT Return, it needs to submit the details of the taxable business and the TRN Number. If it outsources the VAT TAX filing in UAE to certified agents, then the TAAN – Tax Agent Approval Number or the TAN- Tax Agency Number must be provided. In such a scenario, the details about the tax agent and the tax agency must be provided while submitting the VAT Return Filing form.

Other VAT related details need to be furnished, such as:

All the information related to the VAT collected from sales and other sources, expenses incurred, and businesses must furnish the reporting details with the net VAT amount correctly.

UAE VAT Consultancy is a reliable name and trusted by thousands of businesses in the UAE for accurate VAT Return filing. Stop chasing deadlines, avoid penalties by relying on certified VAT experts. Invest your energy and time on core business operations and outsource the VAT-related tasks to professionals. With thorough checking of the VAT Accounting records, they will file the VAT return before the deadline approaches, giving you peace of mind.

How to File a Tax return correctly?

Penalties imposed on incorrect VAT Return Filing in UAE

The taxable person failing to file the VAT return within the stipulated timeframe 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 Payable Tax as per the VAT return or Tax Assessment is not cleared within the specified period, then

  • The taxable business is liable to pay 2% of the unpaid tax immediately.
  • On the 7th day following the deadline, 4% of the unpaid tax becomes due has to be paid.
  • The FTA will charge a 1% daily penalty on any unpaid amount after one calendar month after the deadline ceases for payment which FTA can impose at a maximum of 300%.

If the VAT Return has been filed incorrectly, then the FTA imposes-

  • A fixed penalty of AED 3000 for the first time, and if the person repeatedly fails to furnish correct records, the FTA imposes a fine of AED 5000. 
  • If the Taxable person does not make a voluntary disclosure or discloses only after receiving the Tax audit notice and the FTA starts the audit process or after being asked for information about the Tax audit- whichever instance takes place first- a penalty of 50 % is imposed on the taxable business. 
  • If, after being notified by the tax authority, the taxable person makes the voluntary disclosure and before the TAX authority initiates the tax audit process, then the FTA levies a 30% fine.
  • 5% penalty is levied if the taxable person voluntarily discloses before the authority’s notification for the Tax audit.

Suppose the legal representative/ VAT agent for the taxable person does not file the VAT return before or on the deadline for the VAT Return filing. In that case, the agent/agency is liable to pay a penalty of AED 1000 for the first time of such an instance. But if the VAT return is still not filed within 24 months, the FTA imposes a penalty of AED 2000.

Accurate VAT Return Filing in UAE with a few clicks.

Why should you choose UAE VAT Consultancy for VAT Return Filing in UAE?

We At UAE VAT Consultancy have a panel of VAT professionals skilled at providing VAT Consulting services . They assist you in filing the VAT return as per the FTA guidelines. You need not dread penalties and notices from the FTA as we provide you with timely and 100% accurate VAT filing services.

Our services cover every aspect of the VAT-related services – VAT Registration, VAT filing, VAT Accounting Services, VAT Deregistration, and VAT Training and Support services. Contact us for all your VAT-related requirements- we are a one-stop destination for all VAT-related work.

Make your Business VAT Compliant with VAT Certified Experts. Contact Us Now to Get Timely VAT Return Filing Services.

Our Strengths

With our dedicated VAT services, we are considered one of the top professional VAT Service providers in Dubai and the UAE. With a customer-centric approach and transparency in operations, we provide the best services to businesses all over the UAE.

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