Filing VAT Returns in UAE Easily Avoid Fines and Stay Compliant

        

In the UAE, after registering your company for value-added tax (VAT), filing VAT returns in UAE is a necessary compliance step. You can file VAT returns through the Federal Tax Authority’s online portal. Make payments before the due date to abstain from being fined by the authorities.

The VAT form in the UAE is called VAT 201. The taxpayer must fill out this form, submit it online, and complete the VAT return filing process. This form contains the company’s sales and purchases during a tax period. Taxpayers must declare exempted imports/exports, supplies, and VAT collected or paid. Let us look at the VAT filing process in detail.

Understanding Filing VAT Returns in UAE and VAT Liability

The VAT liability is a document that shows the difference between VAT charged on all the sales of goods and services made by a company during the tax period.  

To calculate VAT liability, total the amount of VAT calculated and subtract VAT credits. The resulting amount is a VAT payment. 

VAT Filing Period in UAE

The end date for submitting VAT returns and payments is mostly one month and a week after the end of the tax period. The common taxable period is the following.

• A company with an annual income of less than AED 150 million must pay tax once every three months.
• A company with an annual income of AED 150 million or more must pay tax once every month.

Important Points

During the filing period, some points must be remembered, which are,

• Any due payment must be made to the FTA by the same deadline for VAT filing.
• If the due date is on a day off or weekend, the next date is considered the deadline.
• A Taxable person’s VAT period is three months.
• The tax periods may be different for each taxable person.
• The FTA can fix the tax period every month.
• A taxable person can ask the FTA to extend the tax filing period.

If you do not keep your business invoices, you can face fines of up to AED 10,000. If the taxable person does not comply again in the next 24 months, the fine will be increased to AED 2,000 for each act of misconduct.

How to File for VAT Return in UAE

You can file for a VAT return in the UAE via the online FTA portal. It is important to meet all requirements before submitting your form. 

How to File VAT Return in UAE in FTA Portal

A taxable person must pay their due taxes by the due date for every return. You can apply through the FTA website using E-Dirham cards. Here’s how to file VAT return in UAE step by step in FTA portal. There are four steps involved in submitting a VAT return.

Login to the FTA e-service portal and go to the “VAT” tab to access your VAT returns. From this screen, click “VAT 201 – New VAT Return.”

Complete the form. Fill in the following details.

• The sales, all other outputs, expenses, and other inputs, which include. 
• The net amounts excluding VAT
• The VAT amount

After that, the system will calculate the payable or refundable tax for you.

Submit the Form. Carefully review all the information entered on the form and confirm the proclamation. Once all the information included is confirmed to be correct in the VAT return form, click on the submit button. 

Submit the Payable VAT. You can pay the VAT through the “my payments’ tab. Keep in mind the due date and make payments before them.  

For further information, you can visit the Federal Tax Authority website.

VAT Return Filing Format in UAE

Given below is the VAT return filing format in UAE that you can refer to

How to File VAT Return in UAE

Filing a VAT return is simple if you know the necessary steps. Here’s how to file VAT return in UAE step by step in FTA portal.

• First, log in to the FTA EMARATAX portal with your username and password.

• After logging in, go through VAT, then “View all” under my filings” then click on “File” for the filing period.

• The next step is accepting the guidelines and starting the application procedure.

• Here, the window will display the details of the filing period according to the VAT return selected.

• Some parts of the form will be automatically filled based on the information you provide. You can complete the rest of the form and edit it if needed. You can also use the given offline template to fill out the form offline in an Excel sheet.

• The next step is adding VAT sum sales details and making adjustments where required (boxes 1 to 7). Autocomplete sections are also included in this.

• Type in details about the standard rate sales in the relevant emirate in box 1
• The tax repayments given to tourists under the “Tourist Refund Scheme” section will also be auto-filled. Click on “view details” to check the auto-filled data.

• Provide zero-rated and exempted sales in boxes 4 and 5

• Box-6 will be auto-populated with the information received from customs. Check the details by clicking on “view details,” if the data is incorrect, you can adjust it with the help of box 7.

• Box 8 is boxes 1-7, meaning the total sales and tax liability for the return period.

• Enter the amount in box ten and make adjustments for standard rate expenses.

• In box 10, write in reverse charge purchases.

• Box 11 is boxes 9-10, meaning total inputs for the return period.

• Box 12-13 shows the total input and output for the return period. Box 14 shows the payable tax or paybacks for the return period.

• Under “Profit Margin Scheme,” select “Yes” if you have reported using the same thing. Select “no” if not. Next, click” Save as Draft” to save the given detail and click “Next step” to advance.

• Here, you will see the data you have provided, and you can review it before submitting it.

• Click on “Submit” to submit your form.

After submitting the VAT return, you will get a reference number. This reference number and related documents of VAT return are important and must be kept for five years. 

Required Documents for VAT Return Filing

Some necessary documents need to be submitted with the VAT return filing process. These include the following.

• Certificate of VAT Registration

This document is the proof of your company’s VAT registration in UAE. This document has your personal tax number, which is called the Tax Return Number, and it is necessary for VAT return filing.

• Trade License

With the help of this document, your business becomes legal, allowing you to run your company in the UAE.

• Financial Report

You must submit your company’s business records, bank statements, debit and credit information, and import/export history. These documents are necessary for calculating output and input tax.

• Tax Bills

A company must keep all its tax bills issued to the clients and received from sellers. These will help you calculate the correct amount of VAT that you have collected and paid.

• Customs Record

Keeping customs records of your trade is necessary for an import and export business. These documents will help calculate VAT on import/export goods.

• Payment Receipts

You should keep a record of your company’s payment receipts, which will help you claim the input tax credit.

Key Aspects for Filing VAT Return Process

Certain information is generated automatically during the VAT filing process, including your name, home address, tax registration number, VAT return period, tax year end, VAT return reference number, and due date of VAT return submission. However, there is certain information that requires attention.

• The amount to be paid must be in UAE Dirhams.
• The amount to be paid must be rounded off before making payment.
• All the required sections must be filled.
• If there is no amount to put, enter zero.
• You must provide details due to taxable supplies according to the emirate.

Significance of Filing VAT Return on Time

You will get many benefits if you file your VAT return on time.

• Increases the reputation of your business.
• You can stay clear of charges and fines
• Compensation of input tax
• Compensation of import/export products via Reverse Charge Mechanism
• It helps avoid errors in the VAT filing process

Summary

To sum up, filing VAT returns in UAE is submitting a tax report to the Federal Tax Authority before the due date arrives. The taxable individual files VAT returns after a certain period. It has many benefits, including legal affirmation preventing any financial deficit. 

It is important to be careful and prepared before filing for VAT returns, which can be done with the help of an experienced business consultant company like AL-Riyady! Our skilled team will help you with the documentation required for VAT filing and the procedure. Our other services include Accounting, Auditing, and Tax Consultancy.