How to submit a VAT return online in UAE?

In the United Arab Emirates (UAE), businesses registered for Value Added Tax (VAT) are required to submit periodic VAT returns to the Federal Tax Authority (FTA). These returns summarize a business's taxable supplies and purchases for a specific tax period, ultimately determining their VAT liability. To submit your UAE VAT return online, register on the FTA EmaraTax portal, complete the VAT return form, submit it electronically, and settle any payable VAT amount. This article provides detailed information and steps regarding how to submit a VAT return online in UAE.

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What is VAT return in UAE?

In the UAE, a VAT return acts as a tax report submitted by registered businesses to the Federal Tax Authority (FTA). It summarizes the business's VAT activity for a specific tax period (usually quarterly). This report details the value of taxable supplies (sales), purchases made, and the corresponding VAT charged or claimed. Essentially, the VAT return calculates the net VAT liability of the business, indicating whether they owe VAT to the government or are eligible for a VAT refund. Filing VAT returns electronically through the FTA eServices portal is mandatory for all registered businesses in the UAE.

Who should submit VAT return in UAE?

In the UAE, any business registered for Value Added Tax (VAT) must submit VAT returns, regardless of their activity during the tax period.

• Registered Businesses: This includes companies of all sizes, from small startups to large corporations, once they meet the VAT registration threshold of exceeding AED 375,000 annual taxable supplies or voluntarily register.
• Tax Period Activity: Even if a registered business doesn't make any taxable supplies (sales) or incur any VAT-related expenses during a tax period, it is still obligated to submit a VAT return. This "nil return" informs the Federal Tax Authority (FTA) of its inactive status for the period.

How to submit a UAE VAT return online?

Use the following steps to file a VAT return online in UAE,

Step 1. Accessing the VAT Return Form

• Log in: Go to the FTA EmaraTax portal and log in using your registered credentials.
• Navigate to VAT Section: Locate the "VAT" tab on the dashboard.
• Initiate Filing: Click on "VAT 201 - VAT Return" and then select "VAT 201 - New VAT Return" to access the blank form.

Step 2. Completing the VAT 201 Form:

The VAT 201 form consists of various sections requiring specific details. Here's a breakdown of the key information you'll need to provide:

• Tax Period Details: Select the relevant tax period for which you're filing the return.
• Taxable Person Details: Verify your company's registered information, including the Tax Registration Number (TRN) and trade name.

VAT on Sales and All Other Outputs (Boxes 1 to 8):

• Record Net Amounts: Enter the total value of your taxable supplies (sales) excluding VAT for different categories.
• Calculate VAT Amounts: For each entry, provide the corresponding VAT amount based on the applicable rate (typically 5%).
• System Calculates Net VAT: The system will automatically calculate your net VAT payable or refundable based on the difference between your total output VAT and total input VAT (explained below).

VAT on Expenses and All Other Inputs (Boxes 9 to 14):

• Record Purchases: Enter the value of your VAT-inclusive purchases for various expense categories.
• Calculate Input VAT: Calculate the recoverable input VAT amount for each expense entry.
• System Calculates Total Input VAT: Similar to the output section, the system will automatically calculate the total input VAT for the period.

Step 3. Submitting and Reviewing:

• Review Information: After completing all sections, carefully review the entered information for accuracy to avoid potential errors and penalties.
• Electronic Signature: The authorized signatory within your company must electronically sign the return to confirm its authenticity.
• Submit the Return: Click the "Submit" button to file your VAT return online officially.

Step 4. Making VAT Payments (if applicable):

• Access My Payments: If your net VAT position indicates a payable amount, head to the "My Payments" tab within the eServices portal.
• Settle the Payment: Choose your preferred payment method (electronic funds transfer or credit card) and settle the due amount before the deadline set by the FTA to avoid penalties.

To get detailed instructions: How to file VAT returns in UAE?

Deadlines for Submitting VAT Returns in UAE

In the UAE, deadlines for submitting VAT returns are standardized for all registered businesses. The standard filing period is quarterly, with the deadline falling on the 28th day of the month following the end of the tax period. For instance, if your tax period covers January, February, and March, the VAT return for that period would be due on April 28th. It's important to note that if the deadline falls on a weekend or public holiday, the next business day becomes the due date.

Consequences of Not Submitting VAT Returns in UAE

Failing to submit your VAT return in the UAE on time can negatively impact your business financially and potentially disrupt its operations. Here are the consequences you might face if you're non-compliant with filing VAT returns in UAE.

• Penalties: The Federal Tax Authority (FTA) imposes penalties for late VAT return submissions. The specific penalty amount depends on the number of days overdue. Here's a general breakdown:
• First Offense: A penalty of AED 1,000 (approximately USD 272) is typically imposed for the first late submission within 24 months of a previous offense.
• Repeat Offenses: Penalties increase for subsequent late submissions within the 24-month window, potentially reaching AED 2,000 (approximately USD 545).
• Interest on Late Payments: If your net VAT position indicates a payable amount, any delay in settling the due tax will accrue daily interest charges. These charges are calculated based on the prevailing interest rate set by the FTA.

Also read: 10 Tips to avoid VAT Late Payment Penalty

Conclusion

This article provides a comprehensive guide on submitting VAT returns online in UAE. It covers everything from a VAT return and who needs to file one to step-by-step instructions on completing and submitting the VAT 201 form through the FTA eServices portal. Remember, filing your return on time is essential for meeting the deadline (typically the 28th day following the tax period) and avoiding penalties.

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