VAT Return in UAE – What are the Conditions and Requirements You Should Know?

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Value Added Tax (VAT) is implemented in the UAE for business entities having an annual turnover of AED 375,000 or more. Given that, it is necessary to understand the process of VAT registration, return filing, and other related matters to avoid penalties and ensure tax compliance.

A person obligated to register for tax is required to file a VAT return in the UAE to Federal Tax Authority (FDA) on a quarterly or monthly basis. VAT submission in UAE is filed according to the specified date and duration stated on the VAT application, within 28 days from the end of a tax period. To make your procedure smooth and easy to understand, you can approach VAT consultants to deal with VAT registration, return filing, and payment to meet compliance obligations.

Conditions and Requirements Under UAE VAT

Every taxable person is mandatory to apply for a VAT return within FTA at the end of a tax period. The FTA should receive a VAT return, not after than 28th day following the end of a tax period. Non-filing and delay in filing can lead to serious repercussions and thereby, consulting a VAT expert could be a viable option to ensure tax compliance.

What Should Be Included in VAT Return?

A tax return should contain all the requisite details as requested by FTA that are as follows:

  • The name, address, and TRN of the registrant
  • Tax period associated with VAT return filing
  • Date of submission
  • Value of tax supplies subjected to a person in the tax period, output tax charged and emirates-wise
  • The value of exempt supplies completed by the person in the tax period
  • The value of expenses incurred wherein the person trying to recover input tax and recoverable tax
  • The total value of due tax and recoverable tax in the tax period
  • The payable taxation for the tax period

How to file VAT Return to FTA?

The filing of VAT returns becomes much convenient with an online procedure and it can be easily performed through FTA’s portal. The company needs to file the return in VAT 201 form. You can take help from VAT professionals to file the tax return and check the following details:

  • Standard rated supplies
  • Tax refunds
  • Supplies subjected to reverse charge mechanism provisions
  • Exempt supplies
  • Adjustments to goods imported
  • Standard rated expenses
  • Evaluation of due tax
  • Refund of recoverable tax

Consequences of Non-Compliance with VAT Return

Failing to adhere to VAT rules and regulations will result in serious penalties from the FTA. Failure to file a VAT return on time can result in common administrative penalties associated with tax return filing.

A VAT registered person need to bear a penalty of AED 1,000 if fails to file a tax return on a given time period by FTA. Moreover, if the offense repeats within 24 months, a taxable individual need to pay a penalty of AED 2,000.

Filing Inaccurate VAT Return

Inaccurate filing of VAT returns will make a taxable person liable for a penalty. Two types of penalties include:

  • A fixed penalty of AED 3000 for the first time and AED 5000 for the second time
  • A percentage depends on the amount unpaid due to error to FTA

Failing to Voluntary Disclose Errors

A VAT registrant who fails to disclose errors voluntarily in the tax return will bear the following consequences:

  • A fixed penalty of AED 3000 for the first time and AED 5000 for the second time
  • 50% of amount unpaid to authority due to error, which is beneficial for a taxpayer

Conclusion:

Dealing with VAT return filing can be a complicated process as non-compliance can cause serious consequences. The taxable person should have a clear knowledge of the tax period, conditions, and other requirements made by the FTA to ensure tax compliance while filing a VAT return. Therefore, it is advisable to hire a VAT consultant to execute the VAT registration and return filing procedure in the best possible manner.

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