How to File VAT Return in UAE – Steps for VAT File ReturningNovember 25, 2021
Are you operating a VAT registered business in Dubai, UAE? At the end of each tax period, you will have to file a ‘Value Added Tax return(VAT)’ to the Federal Tax Authority (FTA). A VAT return shows the value of the purchases and supplies that a taxable person makes during the specified tax period, showing the person’s VAT liability.
Article 64 of the Executive Regulations of the VAT Decree-Law indicates that the Federal Tax Authority expects to obtain the VAT Return within a suggested period – 28th day right after the tax period ended. In addition to that, no filing or late filing of Value Added Tax might result in severe consequences.
So let’s do a thorough analysis pertaining to the VAT returns filing process. Below we have briefly described the most common queries and misconceptions that people have about it.
When Do Businesses Need To File VAT Returns?
UAE levies a 5% VAT at the point of sale. According to the VAT registration guidelines, the registration is categorized into voluntary VAT registration, mandatory VAT registration, and exemption VAT registration.
Not every business is required to get VAT registration; only those whose taxable value of supplies surpasses AED 375000 over the preceding 12 months’ period or if it surpasses the threshold in the flowing 30 days.
Most of the businesses in the UAE are supposed to file VAT returns on a quarterly basis if the annual turnover is below AED 150 million. On the other hand, a particular class of businesses is expected to file their VAT returns after every month in cases when the annual turnover exceeds AED 150 million.
It’s noteworthy to know that FTA may assign a different tax period for a specific class of businesses at its choice.
What Are The Necessary Steps to Register a Business For VAT in UAE?
To get your business registered for value-added tax is an online process that you can do through an FTA’s portal only.
In UAE, the FTA has not yet passed any guideline that allows an offline VAT return filing. There is a VAT 201 form available in the FTA’s portal where business entities can file VAT returns upon the expiry of the tax period. On behalf of the taxable persons, registered tax agents living in Dubai can file their tax returns to help businesses meet VAT compliance without any obstacles.
After you log into the FTA portal, you’ll require to check the following:
- Imported goods
- Exempted Supplies
- Zero-rated supplies
- Calculation of due tax
- Standard rated supplies
- Refund of recovered tax
- Standard-rated expenses
- Tax refunds are given to travelers
- An Accurate Calculation of due tax
- Supplies that are subjected to the Reverse Charge Mechanism Provision
However, if you still have any queries regarding VAT returns in UAE, you can get in touch with the leading tax consultancy Avyanco. Refer to the best auditing and tax consultancy team when it comes to assisting you in filing a VAT return. Avyanco Auditing is one of the most experienced units when it comes to taxation and financial advisory in UAE. We make sure to evaluate each and every important factor before filing your VAT return in Dubai, UAE. We calculate each item of purchases and sales, and this ensures 100% accuracy.
Possible Penalties of Non-Compliance With VAT Return Filing Requirements in UAE?
Prepare yourself to receive hefty penalties from the Federal Tax Authority if you fail to comply with the UAE VAT Return Filing laws.
Some common VAT administrative penalties pertaining to the return filing include a penalty of 1000 AED is charged on the VAT registrant who does not file the return on the given timeframe as fixed by the FTA. Moreover, the VAT registration will also be liable to pay AED 2000 as a penalty for repeating this offence within a period of 2 years.
What Are The Mistakes That One is Likely to Make While filing a VAT Return?
This is one of the most frequently asked questions that concerns people who are filing a VAT return in the UAE for the first time.
There are three common mistakes that people make while doing so.
- Failure in Filing the VAT on Time
- Intentionally Hiding the VAT Errors
- Accidently Filing Incorrect VAT Return
If you commit any of the above-mentioned mistakes, then you can expect to get slapped with the below penalties
- Payment of AED 3000 as a fixed penalty for the first time, and payment of AED 5000 as a penalty for repeating the same mistake again.
- A percentage of the unpaid amount will be paid as a penalty to the FTA in case of an error.
Are There Any VAT Consultants in Dubai?
Yes, there are a number of VAT Consultants in Dubai that you can reach out to.
It is advised to most people to seek VAT consultants if it’s their first time filing a VAT return. VAT Consultants offer great assistance to laymen who do not have prior experience in filing VAT returns. Such consultancy services comprise a staff of qualified tax team that offers you a clear understanding of this process every step of your way.
How Can Avyanco Help You in Filing Your VAT Return Dubai and UAE?
For a smooth VAT return filing experience, you can seek help from Avyanco. Our guidance is bound to make the process simpler. It’s a reliable auditing and consultancy firm based in Dubai, UAE that possesses high-quality VAT consulting services.
Our core goal is to offer our startups and businesses with effective VAT return filing assistance, compliance, support, and other relevant services. Whether it’s about recording the bookkeeping of your firm or filing the VAT return, Avyanco is the go-to financial consultancy service that is all here to help you anytime, you need it.
Services that we offer include:
- VAT registration
- Filing Vat returns
- Managing tax inspection
- VAT compliance process
- Payments of return submissions
We have a team of advisors, accountants, and tax agents that are proficient in VAT rules and regulations and taxation laws of UAE. Our expertise helps businesses in managing the impact of TAX and VAT issues on their ongoing business dealings.