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UAE VAT Return Filing

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VAT Return Filing

Businesses that have completed VAT registration in the UAE are obligated to submit a 'VAT return' to the Federal Tax Authority (FTA) at the end of each tax period. This requirement is mandatory for all VAT-registered entities, regardless of the nature or scale of their sales, purchases, or tax considerations.

At filings.ae, we specialise in providing comprehensive support and expert guidance to ensure your VAT return filing is seamless, accurate, and fully compliant with UAE tax regulations. Whether you are a small start-up or a large corporation, our tailored services are designed to meet your specific VAT needs.

Value Added Tax (VAT)

Value Added Tax (VAT) is a tax added to the price of goods and services at each step of production or sale. In the UAE, businesses that earn over a certain amount each year must register for VAT. This means they have to charge their customers VAT and pay it to the government. VAT registration helps the UAE government collect taxes and ensures businesses follow the rules.

Effortlessly complete your VAT registration through Filings.ae now!

VAT Return

A tax return is a formal document summarising all the sales and purchases a taxpayer has made during a specified tax period. This summary includes detailed information on imports, exports, exempt supplies, and the VAT (Value Added Tax) paid or collected on each transaction. In the UAE, this document is essential for VAT purposes and must be meticulously compiled based on the invoices generated during the tax period. Once prepared, filing this tax return through the Federal Tax Authority's (FTA) official portal is mandatory.

Creating and submitting a VAT return regularly is compulsory for every taxpayer registered for VAT in the UAE.

VAT Return Filing

As mentioned above, every VAT-registered taxpayer in the UAE is obligated to generate and submit a VAT return at regular intervals. These intervals, known as tax periods, are typically set as either monthly or quarterly (every three months), depending on the guidelines specified by the FTA in the taxpayer's VAT registration certificate.

This VAT Return Filing process is a crucial aspect of VAT compliance in the UAE, ensuring taxpayers accurately report their VAT liabilities and credits based on their business transactions. The deadline for completing VAT return filing and associated VAT payments is within 28 days following the end of the tax period.

VAT Return Filing Deadlines

VAT Return Filing must be completed regularly as determined by the 'tax period' applicable to each business. The standard durations for tax periods are as follows:

Quarterly Filing: This applies to businesses with an annual turnover below AED 150 million. These businesses must file their VAT returns every three months.
Monthly Filing: Businesses with an annual turnover of AED 150 million or more must file VAT returns each month.

The deadline for filing VAT returns, whether on a monthly or quarterly basis, is consistently set as the 28th day of the month following the conclusion of the VAT return period.

Additionally, the FTA holds the discretion to assign different tax periods for certain types of businesses based on specific criteria or conditions. Businesses must comply with these filing deadlines, as failing to file VAT returns within the stipulated 28 days from the end of the tax period can result in penalties.

Procedure for VAT Return Filing in the UAE

VAT registered businesses must file for tax returns electronically through the FTA portal. Before submitting the VAT return form on this portal, it's crucial to ensure that all tax return prerequisites are fully met.

VAT 201 Return Form

The VAT Return form, designated as 'VAT 201', is the essential document taxpayers must complete for VAT Return filing in the UAE. This form is divided into seven key sections, each requiring specific information:

Taxable Person Details: Information about the taxpayer or the business.
VAT Return Period: The specific tax period for which the return is filed.
VAT on Sales and All Other Outputs: Details of VAT collected from sales and other taxable outputs.
VAT on Expenses and All Other Inputs: Information on VAT paid on business expenses and other inputs.
Net VAT Due Calculate the net VAT payable or reclaimable by the taxpayer.
Additional Reporting Requirements: Any other necessary information required by the FTA.
Declaration and Authorized Signatory: Formal declaration and signature of the person authorised to file the return.

Each section contains boxes where detailed information must be entered to complete the VAT Tax return filing accurately. It's crucial for taxpayers to meticulously fill out each part of the form to ensure compliance with UAE VAT regulations.

Penalty for VAT Return Filing

The following table provides a detailed overview of the penalties associated with various violations related to VAT return filing in the UAE:

No	Violation	Penalty
1.	Failure to keep the required financial records (first time)	AED 10,000
	Failure to keep the required financial records (repeat violation)	AED 50,000
2.	Failure to submit documents in Arabic when requested by FTA	AED 20,000
3.	Late VAT registration fine	AED 20,000
4.	Late VAT De-registration fine	AED 10,000
5.	Failure to inform FTA of changes in tax records (first time)	AED 5,000
	Failure to inform FTA of changes in tax records (repeat)	AED 15,000
6.	Late filing of tax return / Late VAT return (first time)	AED 1,000
	Late filing of tax return / Late VAT return (repeat within 24 months)	AED 2,000
7.	Late VAT payment penalty	2% immediately, 4% after seven days, 1% daily after one month, up to 300%
8.	Filing of incorrect VAT return (first time)	AED 1,000
	Filing of incorrect VAT return (in case of repetition)	AED 2,000
	Percentage-based penalty for incorrect VAT return	50% / 30% / 5% depending on the timing of voluntary disclosure
9.	Submission of VAT Voluntary disclosure (first time)	AED 3,000
	Submission of VAT Voluntary disclosure (repeat)	AED 5,000
	Percentage-based penalty for VAT Voluntary disclosure	50% / 30% / 5% depending on the timing of disclosure
10.	Failure to voluntarily disclose errors before a tax audit (first time)	AED 3,000 + 50% of unpaid amount
	Failure to voluntarily disclose errors before a tax audit (repeat)	AED 5,000 + 50% of unpaid amount
11.	Failure to facilitate the work of FTA tax auditor	AED 20,000
12.	Incorrect simplified tax invoice	AED 5,000
	Incorrect full tax invoice	AED 10,000

VAT Liability in the UAE

VAT liability in the context of UAE tax regulations refers to the balance that emerges from subtracting the input tax (VAT incurred on purchases) from the output tax payable (VAT charged on the supply of goods and services) for a given tax period.

When the output tax for a period surpasses the input tax, the resulting difference must be paid to the Federal Tax Authority (FTA). Conversely, if the input tax is greater than the output tax, the taxable person finds themselves with excess input tax. This excess can be utilised to offset future VAT payments due to the FTA, providing tax relief and maintaining a balanced financial obligation for the business.

File Your VAT Return with Ease through Filings.ae

At filings.ae Our team of dedicated experts can assist you in filing your VAT return efficiently and correctly. Our professionals are well-versed in VAT regulations and can guide you through each step of the process. From preparing the necessary documentation to submitting your return form through the FTA portal, we ensure that your VAT filing complies with all regulatory requirements, thus avoiding potential errors or penalties. With our support, you can easily and confidently navigate the complexities of VAT return filing.