VAT Return Filing Service in UAE
A tax return is a document in which a tax registrant submits the details of his supplies and purchases to the Federal Tax Authority (FTA) in the UAE.
VAT return filing in the UAE is determined by the tax periods assigned to your business by the FTA upon VAT registration. During the approval stages of VAT registration, the FTA determines the tax periods for registrants, which can be monthly or quarterly as the authority deems.
VAT Return Filing in the UAE is a completely online process in which a tax registrant can present the value of their sales and purchases and remit the tax due.
A VAT registrant can apply for a tax refund if the supplies are less than the purchases. The application for a tax refund is a separate procedure that necessitates the submission of additional information as requested by the FTA.
VAT Return filing in the UAE does not necessitate the submission of documents such as tax invoices or tax credit notes at the time of filing. The registrant is responsible for keeping all documents related to his business and must provide them when requested by the FTA.
The Importance of Filing VAT Returns in the UAE
It is a business’s responsibility as a tax registrant in the UAE to report the details of its supplies to the authority. In comparison to other tax regimes, VAT return ling in the UAE is a relatively simple process if you thoroughly understand the law.
Because it is perceived as a simple process, we have seen many businesses take it lightly and end up paying hefty penalties. As a result, it is critical that you file your VAT return correctly and on time.
Penalties associated with VAT Return ling in the UAE
If a taxable person fails to file his return on or before the due date, he will be assessed a non-recurring penalty of 1,000 for the first time. In the event of a repeat, 2,000.
If a taxable person fails to remit his dues on or before the due date, he will incur a non-payment penalty as follows:
- 2 % of the unpaid tax is due immediately.
- 4% is due on the seventh day after the payment deadline.
- 1% A daily penalty will be charged on any amount that remains unpaid one calendar month after the due date for payment, up to a maximum of 300 %.
These VAT penalties will be calculated and charged to your FTA account automatically as of the default date. Such VAT penalties can result in a significant cash outflow for a business, which can be avoided by paying close attention to tax return filing.
Some of the common errors businesses make while VAT Return Filing
It is very crucial for a business to understand the layout and reasoning for each column in a VAT return. Only by a proper understanding of the law, one can understand the intended use of a particular column in a tax return.
Some of the most common errors we have noted are as follows:
- Failure to issue a valid tax invoice in accordance with the law.
- Failure to keep proper records.
- Incorrect emirate-wise reporting.
- Incorrect bad debt adjustment.
- Wrong usage of ‘Adjustment’ column in case of imports
- Misclassification of exports and out-of-scope supplies.
- Incorrectly entered claims, including personal and entertainment expenses.
- Input taxes were incorrectly adjusted in the wrong tax periods.
- The incorrect use of Refund and VDF Forms.
- Non-disclosure of service import
Therefore mentioned VAT Return Filing mistakes are only the tip of the iceberg, and they can lead to massive errors in the tax return. A company must exercise extreme caution when assessing its ability to address these issues, as failure to do so may result in noncompliance.
Our role in VAT Return Filing
Our members have gained experience by assisting over 2000 clients in the UAE in successfully submitting their tax returns. We consider it our responsibility to remain updated on the region’s ever-changing tax scenarios.
By analyzing your transactions and identifying the tax points involved, we can advise you on the correct tax treatments for your business.
CAPELLA, As VAT Consultants in UAE, we will extend our guidance, support, execution, and resolution on all your challenges encountered, based on the provisions and guidelines issued by FTA, based on our expertise and knowledge in the related eld after encountering practical scenarios that we face on a daily basis.
Get in touch
REQUEST A FREE QUOTE NOW!
Take the first step towards improving your accounting system
Fill out the form below and we’ll be in touch with you soon: