(VAT Refunds procedure for UAE Nationals building new residences in the UAE) – UAE Nationals building new residences in the UAE and incurring VAT on the cost of the construction can claim VAT Refunds after producing the following supporting documents:
Copy of Family Book
Copy of Emirates ID
Document to the proof building is occupied (For e.g., Water and Electricity Delivery Bill)
Construction contract and certificate of completion from the municipality
Such expenses must have been incurred in relation to a new building that is used as a residence of the applicant or their family. The refund form must be sent to FTA within 6 months from the date of completion of newly built residence.
How to apply for VAT Refunds? (VAT Refunds procedure for UAE Nationals)
N R Doshi & Partners, the UAE’s renowned auditing firm in Dubai, is driving growth through expertise for its client’s business for more than 30 years. Headquartered in Dubai, N R Doshi & Partners has seven offices in the UAE, employing over 100 professionals. Our company consistently ranks among the top firms in the UAE and continues to have a dominant presence in the audit and assurance industry, driven by results and set on the bedrock of trust. N R Doshi offers a plethora of wide gamut of services-audit and assurance, VAT consulting, accounting, advisory, company incorporations, and outsourcing services which translates into:
Federal Tax Procedures Law and Federal Decree-Law on VAT provide forVAT penalties/VAT administrative penalties in UAE. Every business in the UAE must be familiar with VAT Laws and comply with its provisions to contribute towards the nation’s growth and avoid VAT penalties.
Failure to keep the required records and other information specified in the Tax Law:
AED 10,000 for the first time
AED 50,000 in case of repetition
Failure to submit the data, records, and documents related to Tax in Arabic to the Federal Tax Authority when requested:
AED 20,000
Failure to submit a registration application within the specified timeframe:
AED 20,000
Failure of the registered business to submit a deregistration application within the specified timeframe:
AED 10,000
Failure of the registered business to inform the FTA of any circumstance that requires the amendment of the information pertaining to his tax record kept by the Authority:
AED 5,000 for the first time
AED 15,000 in case of repetition
Failure of the person appointed as a legal representative for the taxable person to inform the Authority of his appointment within the specified timeframe. This penalty will be due from the legal representative’s own funds:
AED 20,000
Failure of the person appointed as a legal representative for the taxable person to file a Tax Return within the specified timeframe. The penalty will be due from the legal representative’s own funds:
AED 1,000 for the first time
AED 2,000 in case of repetition within (24) months
Failure of the Registrant to submit the tax return within the timeframe specified in the tax law:
AED 1,000 for the first time
AED 2000 in case of repetition within (24) months
Late payment penalty (Payable Tax stated in the submitted tax return or tax assessment):
2% of unpaid tax is due immediately
4% is due on the seventh day following the deadline for payment
1% daily penalty on any amount that is still unpaid one calendar month following the deadline for payment (max 300%)
Incorrect tax return by the taxable business. Two penalties are applied:
Fixed Penalty
AED 3,000 for the first time
AED 5,000 in case of repetition
% Based Penalty
% based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows:
50% if the registered business does not make a voluntary disclosure or he makes the disclosure after being notified of the tax audit, and the Authority has started the tax audit process, or after being asked for information relating to the tax audit, whichever takes place first
30% if the registered business makes the voluntary disclosure after being notified of the tax audit and before the Authority starts the tax audit
5% if the registered business makes a voluntary disclosure before being notified of the tax audit by the Authority.
11. The voluntary disclosure by the person/taxpayer of errors in the tax return, tax assessment, or refund applicable pursuant to Article 10 (1) and (2) of the Tax Procedures Law. Two Penalties are applied:
Fixed Penalty
AED 3,000 for the first time
AED 5,000 in case of repetition
% Based Penalty
% based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows:
50% if the Person/Taxpayer make as voluntary disclosure after being notified of the tax audit and Authority starting the tax audit or after being asked for information relating to the tax audit, whichever takes place first
30% if the Person/Taxpayer makes the voluntary disclosure after being notified of the tax audit but before the start of the tax audit
5% if the Person/Taxpayer makes a voluntary disclosure before being notified of the tax audit by the Authority.
12. The failure of the Taxable Person to voluntarily disclose errors in the tax return, tax assessment or refund application pursuant to Article 10 (1) and (2) of the Tax Procedures Law before being notified that he will be subject to a tax audit. Two penalties are applied:
Fixed Penalty
AED 3,000 for the first time
AED 5,000 in case of repetition
% Based Penalty
50% of the amount unpaid to the Authority due to the error resulting in a tax benefit for the person/Taxpayer
13. The failure of the business conducting business to facilitate the work of Tax Auditor in violation of the provisions of Article (21) of the Tax Procedures Law:
AED 20,000
14. The failure of the Registrant to calculate tax on behalf of another person when the registered taxable person is obliged to do so under the Tax Law. The Registrant shall be obliged to pay a late penalty consisting of:
2% of the unpaid tax due immediately once the payment of payable tax is late
4% is due on the seventh day following the deadline for payment, on the amount of tax which is unpaid
1% daily penalty charged on any amount that is still unpaid one calendar month following the deadline for payment with an upper ceiling of 300%
15. A person not accounting for any tax that may be due on the import of goods as required under the law:
50% of unpaid or undeclared tax
Violations and administrative penalties related to the implementation of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT):
Failure by the Taxable Person to display price inclusive of Tax:
AED 15,000
Failure by the Taxable Person to notify the Authority of applying tax based on margin:
AED 2,500
Failure to comply with conditions and procedures related to keeping the goods in a Designated Zone or moving them to another Designated Zone:
The penalty shall be the higher of AED 50,000 or 50% of the tax if any, chargeable in respect of the goods as the result of the violation
Failure by the Taxable Person to issue the Tax Invoice or an alternative document when making any supply:
AED 5,000 for each tax invoice or alternative document:
Failure by the Taxable Person to issue a Tax Credit Note or an alternative document:
AED 5,000 for each tax credit note or alternative document
Failure by the Taxable Person to comply with the conditions and procedures regarding the issuance of electronic Tax Invoices and electronic Tax Credit Notes:
AED 5,000 for each incorrect document
VAT Services in UAE
N R Doshi & Partners is a Registered Tax Agent with the Federal Tax Authority in UAE. We provide VAT Consulting Service, which complements our other services, including, Company Formation, Advisory Services, Accounting and Finance, and Outsourcing. It enables us to provide a total solution to our clients so that they can remain compliant and avoid VAT penalties.
Our VAT Consultants in UAE are experienced in your industry and provide a practical solution. They also handle your routine compliance issues starting from VAT Registration, VAT-compliant Bookkeeping, VAT Return Filing, VAT Implementation, Voluntary Disclosure Filing, VAT Audit, Tax Agent Services, TRN Verification, and VAT De-registration.
Our VAT Services in UAEaims to provide the expertise you need to deal with UAE VAT Laws. Contact Us now to proceed towards the right direction in your journey of VAT Compliance and avoiding VAT Penalties.
Value Added Tax (VAT) came into force in the UAE on 1stJanuary 2018. As per UAE VAT Law, the current rate of VAT in UAE is 5%, and it applies to most supplied goods and services. VAT is an indirect tax, and it is also known as a consumption tax or Goods and Services Tax (GST) in different parts of the world. Over 150 countries have implemented VAT as a means to raise revenue. As a renowned VAT Consultancy in UAE, N R Doshi and Partners provides a whole gamut of VAT related services.
Value Added Tax in UAE is charged at each stage of the supply chain. It is the end consumer who bears the burden of VAT in UAE while businesses act as an agent to collect and account for tax on behalf of the Government.
You may use our VAT Calculator for UAE to arrive at the value of VAT that you should charge to your customers.
A business can opt for voluntary vat registration if its taxable turnover is more than AED 187,500.
Mandatory VAT Registration
Mandatory VAT Registration is for those businesses whose taxable turnover is more than AED 375,000.
Businesses having a taxable turnover of less than 187,500 need not register for VAT in UAE.
2. VAT Applicability
As per UAE VAT Laws, VAT is levied on the supply of all goods and services unless they are explicitly zero-rated or exempted.
3. Exempt Supplies
VAT in UAE provides for exempt supplies. UAE Executive VAT Regulations notify about the exempt supplies on which there’s no tax levy. If one supplies such goods and services, then VAT is not charged.
As per UAE VAT Law, if one supplies exempted goods and services, then he will not be entitled to the input tax credit on the purchases he makes. Say a manufacturer buys raw material at a 5% rate of tax and produces items that are exempt from tax, then the burden of 5% input tax paid on raw materials will be on him as he will not be able to claim the input tax credit.
Certain financial services, residential buildings, and supply of bare land, etc. are exempt from VAT in UAE.
4. Zero-rated Supplies
As per UAE VAT, Zero-rated supplies refers to the taxable supply on which VAT is charged at zero rates. The input tax credit is available on the purchase of goods and services, which are supplied as zero-rated supplies. VAT Laws in UAE specify that all export of goods and services in UAE subject to conditions laid down in UAE Executive Regulations will be treated as zero-rated supplies.
5. Products subject to VAT in UAE
VAT in UAE is levied on retail products such as food, beverages and jewelry, and all non-essential consumer items. It is also levied on stationery, school uniforms, after-school activities, cars, oil and gas, electronics and smartphones, second-hand goods, imported products, insurance products such as health, motor, property, and reinsurance, water and electricity, etc.
6. Services subject to VAT in UAE
Services like plastic, cosmetic, or elective surgery, education provided by private higher educational institutions, fee-based financial services, vehicle services, and repairs, catering services, hotels and restaurants, telecoms and electronic services, etc.
7. VAT on Real Estate
Real Estate is bifurcated into two categories for VAT purposes:
Commercial property transactions, including rental and sale agreements, office space, retail, public parking, and mobile homes, will attract VAT. Further, hotels, motels, and other serviced accommodations are also subject to VAT, including residential property leased to non-residents on a short-term basis.
8. TRN Verification
Federal Tax Authority issues a unique Tax Registration / TRN Number to businesses registered for VAT. Only businesses registered for VAT and having a valid TRN should charge VAT on supplies. TRN Number Verification is required when the buyer is not sure of the VAT Registration status of the supplier because any VAT paid on purchases would be available as Input Tax Credit only if the supplier has a valid TRN Number. One can verify the TRN Number of any business by visiting the FTA portal. TRN Verification helps in knowing the genuineness of the supplier.
9. Tax Return Filing
A VAT-registered business files a Tax Return quarterly. The authority may ask certain businesses to file a return every month to ensure compliance with the VAT Laws and reduce the risk of tax evasion. Further, to reduce compliance burden and administrative load, the UAE VAT Law is provisioned to allow certain types of businesses with a longer VAT return filing period.
UAE VAT Executive Regulations have issued the VAT Return Format in which a registered business must provide the information. The return filing process is online, and all VAT-registered businesses in UAE file their Return by logging in on the FTA portal.
10. VAT Audit/ Tax Audit in UAE
VAT Audit / Tax Audit in UAE is carried out by the FTA at the business premises of the taxable person known as ‘field tax audit’ or in the offices of the FTA. The taxable person is required to provide all the information in a prescribed format known as FTA Audit File (FAF). VAT in UAE requires a registered business to maintain all the financial records of transactions and file a periodic VAT Return. A taxable person is required to self assess the amount of VAT Payable and the Input Tax Credit available.
FTA, at its discretion, selects businesses for Tax Audit. The VAT audit aims to verify the correctness of a taxable person’s tax liability. In the course of the tax audit, the FTA has a right to obtain original copies of any record, verify inventories and assets of the business, and even seize them for the audit purpose. The taxable person or his Tax Agent or Legal Representative shall provide all the necessary documentary evidence, help, and assist to the tax authority. After examining the financial records of the taxable person, the FTA is empowered to issue a notice asking him to pay the VAT along with penalties if it finds discrepancies.
Tax Assessment
As per the VAT Laws in UAE, FTA will issue tax assessment in the following cases:
Failing to complete VAT Registration within the specified time
Failing to file a Tax Return within the specified time
Failing to pay for the tax payable as per the VAT Return within the specified time
Filing an incorrect VAT return
Failure on the part of the registered business to account for tax on behalf of another person when he was required to do so as per the UAE VAT Laws
Tax evasion causing the shortfall in Tax Payable
Further, the taxable person would also be liable to pay VAT Penalties applicable under the Federal Decree-Law on VAT. It is in the interest of a taxable business that it fully complies with the provisions of VAT in UAE to avoid penalties and loss of reputation.
11. Responsibilities of a Business in UAE
Maintain proper financial records and keep its accounting information accurate and up to date.
Register for VAT if it meets minimum turnover criteria
Keep proper financial records if the turnover is less than the minimum threshold to prove why it need not register for VAT
Charge VAT on Taxable goods and services if it holds a valid TRN
Claim Input Tax Credit for VAT paid on the purchase of taxable supplies
File VAT Returns on a timely basis
Pay taxes to Government if the amount of VAT charged exceeds the amount of VAT paid.
Obey VAT Laws of the UAE
VAT Consultancy in UAE
N R Doshi and Partners is well-equipped to provide VAT consultancy in UAE and help your business handle VAT related matters, including VAT Bookkeeping, VAT Compliance, VAT Registration, VAT Return Filing, VAT Audit, and VAT Tax Agent Service. Contact us, and our VAT Consultants in UAE will be at your service.
This article talks about VAT registration in UAE, including the VAT registration process, VAT registration threshold in UAE, TRN / VAT number, Online VAT registration in Dubai, and VAT deregistration in UAE.
Value Added Tax (VAT) is one type of indirect tax levied in more than 180 countries around the world. Unlike a direct tax (income tax, corporate tax), VAT is a tax on the consumption or use of goods and services, meaning it is the end customer who bears the cost of it. A Business collects the tax from customers on behalf of the Government. It pays it to the Government and obtains a refund for the tax it pays to the suppliers. To know more about VAT in UAE, refer to 11 things to know about VAT in UAE.
VAT Registration threshold in UAE
VAT Registration Limit in UAE
On 1st January 2018, VAT was introduced in the UAE. Currently, the rate of VAT is 5 percent. As per the VAT Law in UAE, VAT Registration in UAE is a must for businesses whose taxable supplies and imports exceed AED 3,75,000 on a per annum basis. For businesses with turnover exceeding AED 187,500 can optionally register for VAT. Businesses in UAE with a turnover of less than AED 187,500 need not apply for VAT Registration. Businesses expecting taxable turnover to exceed AED 375,000 in the next 30 days shall also register for VAT. While calculating the value of taxable supplies and imports, one needs to exclude the value of exempt supplies.
Obligations of a VAT Registered Business in UAE
Obligations of a Taxable Person in UAE
A VAT-registered business must charge VAT at the applicable rate on taxable goods and services.
It can claim the input tax credit for VAT paid on business-related goods and services. VAT paid on entertainment, personal, and employee-related expenses can not be reclaimed.
It must maintain proper records for the Government to check.
It must pay VAT to the Government
It has to file the VAT return periodically
Applying for VAT Registration in UAE
FTA Portal
The Federal Tax Authority (FTA) looks after managing and collecting federal taxes and fines and applying tax-related procedures in the UAE. There is a portal https://eservices.tax.gov.ae/ maintained by Federal Tax Authority (FTA) for facilitating online VAT Registration in UAE. Accordingly, one has to create an e-service account on the FTA portal and follow the steps for completing the Registration form. The same portal also enables amending a VAT registration and VAT deregistration. While filling up the Value Added Tax Registration Form, ensure that you submit the accurate information.
How to apply for VAT Registration in UAE?
Documents Required for VAT Registration in UAE and Step-by-Step Process for VAT Registration in UAE
1. Keep the following documents ready for VAT Registration in UAE – Trade License – Passport Copy of Manager/Owner or Emirates ID of Manager Owner (If – resident in UAE) or Passport Copy of Authorised Signatory or Emirates ID of – Authorised Signatory (If resident in UAE) – Proof of authorized manager/authorized signatory (articles of association, power of attorney attested by notary)
2. Login to your e-services account
Once logged-in, click on Register for VAT and read out the VAT Getting Started Guide.
3. Fill up About the Applicant section in the VAT Registration Form
4. Fill up Details of the Applicant section in the VAT Registration Form
5. Fill up Contact Detail Section in the VAT Registration Form
6. Fill up Banking Details Section in the VAT Registration Form
7. Fill up Business Relationship Section in the VAT Registration Form
8. Fill up about the VAT Registration Section in the VAT Registration Form
9. Fill up Declaration Section in the VAT Registration Form
10. Review the information and Submit it to the FTA portal
VAT Group Registration in UAE
Tax Group Registration in UAE
Businesses sharing common economic, financial, and regulatory aspects may register as a VAT group. Such common aspects could be in the form of legal status, shareholding, or voting rights. They should have a business in the UAE and should be legal persons under common control. Such VAT registration in UAE is also known as a tax group. A representative member of the group files a consolidated VAT return covering all the activities of the group, and hence it simplifies the accounting and compliance requirements. However, all members of the group remain jointly and severally liable for VAT debts. Further, all the supplies made within the tax group do not attract VAT.
Tax Registration Number (TRN)
VAT Number
Once the Value Added Tax registration process is complete, the registrant receives a TRN. TRN issued by the FTA is a unique 15 digit number differentiating a VAT registered business from the others. The registrant is required to mention his VAT registration number in various documents such as invoice, credit note, VAT return, etc. One can have a look at this article to know about TRN Verification.
VAT Registration Amendments
Changes in VAT Registration
If subsequent circumstances necessitate amendments in VAT registration, then they must be informed to FTA in 20 days from the occurrence of such circumstances. One would be able to make changes on the FTA portal itself, but some of the changes like details of the applicant, contact details, banking details of the applicant, business relationships, among others, require approval from FTA. The thing about VAT Registration in UAE is, changes like Business activities of the applicant, GCC activities section, customer registration information section can be quickly made without seeking approval from the FTA.
VAT Deregistration
Cancelling your VAT Registration
One can deregister as a Taxable Person on the FTA portal if he is required or eligible to deregister.
Penalties for failure to register for VAT in UAE
VAT Laws in UAE
If a business which is required to go for VAT Registration in UAE, fails to register for VAT in UAE within the timeframe specified by the tax law, it will attract a penalty of AED 20,000.
VAT Registration in Dubai
FAQs
1. What is Value Added Tax (VAT)?
Value Added Tax (VAT) is a kind of indirect tax. Businesses collect VAT at each stage in the supply chain, and it is the customer who bears the tax.
2. Why should a business register for VAT?
A VAT registered business can take benefit of input VAT paid on purchases and expenses. Further, non-registration amounts to a violation of the law, and it attracts penalties.
3. What is a Taxable Person?
A Taxable Person is anyone who carries out the specific economic activity and is registered under the VAT law in UAE or required to be registered under the law.
4. What are taxable supplies?
Taxable supplies include a supply of goods and services for consideration in the course of conducting business in the UAE, and it does not include exempt supply. Taxable supplies include standard-rated supplies @ 5%, zero-rated supplies @ 0%, reverse charged services received, and imported goods.
5. My turnover of taxable supplies is less than AED 300,000, but I am expecting it to cross AED 375,000 in the current financial year. Do I have to register for VAT?
Yes, you should go for voluntary VAT Registration in UAE. A person can voluntarily register for VAT if his turnover crosses AED 187,500. Further, anyone who is expecting taxable turnover to cross AED 375,000 in the next 30 days is required by the law to register for VAT. It is important to note here that VAT registration is mandatory if the taxable turnover exceeds AED 375,000.
6. Do zero-rated supplies count towards the AED 375,000 VAT threshold?
Yes, zero-rated supplies do count towards AED 375,000 VAT threshold. You have to calculate your taxable turnover accordingly.
Your search for the best VAT Consultants ends here
N R Doshi & Partners is an FTA Registered Tax Agent. As a tax agent, we can assist our clients in applying for VAT Registration in UAE, fulfilling their tax obligations and exercising their tax rights. We, as a tax agent, can also represent our clients before the FTA if the need arises. We can assist you in fulfilling your VAT compliance requirements, and saving your time and efforts. We are a trusted VAT Registration Consultant in UAE to provide you with VAT Registration Services in Dubai. We are equipped with a highly professional VAT Consultants in UAE to provide you with the best in class VAT Consulting to see that you always remain compliant with VAT laws in UAE.
VAT return filing in UAE is a periodic process. As per UAE VAT Law, everyVAT registeredbusiness shall submit a VAT return toFederal Tax Authority/ FTA, summarizing the value of the supplies and purchases made during the tax period and its total VAT liability.
VAT return what it is
VAT return is the document prepared and submitted by the taxable person at regular intervals providing information as to input tax recoverable, output tax due, and any other information that the taxable person is required to provide.
Tax period for VAT filing in UAE
A taxable business is required to file VAT return with FTA regularly within 28 days of the end of the tax period as prescribed for each type of business. A tax period is a specified period for which tax payable shall be calculated and paid. The standard tax period, as per UAE VAT Law, depends on the annual turnover of a business.
Businesses with a turnover below AED 150 million shall file a quarterly VAT return
Businesses with a turnover exceeding AED 150 million shall file a monthly VAT return
FTA is empowered to assign a different tax period to certain types of businesses. If a taxable person files a late VAT return, then he will be liable to administrative penalties for violations of VAT laws in the UAE.
Tax Period
Due Date for Filing VAT Return
1st January 2020 to 31st January 2020
28th February 2020
1st January 2020 to 31st March 2020
28th April 2020
If the VAT return filing or VAT payment due date happens to fall on a weekend or a national holiday, then the deadline to file VAT return or making a payment becomes the immediately following business day.
How to file VAT Return in UAE
A taxable person should prepare VAT return well in advance as he is required to file VAT return online in the form named as ‘VAT 201’ on the FTA portal. Currently, there is no facility available on the FTA portal to file tax return offline in XML or xls or xlsx format. The taxable person must fill up the VAT 201 form correctly and provide information as to sales, purchase, input VAT and output VAT, etc. There are seven sections, as mentioned below in the VAT 201 form:
VAT Return Filing Steps
1. Taxable Person details
Information as to Tax Registration Number / TRN of the taxable person and contact information. If a Tax Agent is submitting the tax return on behalf of the taxable person, then the information about Tax Agent Approval Number / TAAN) and Tax Agency Number / TAN along with the Tax Agent name and Tax Agency name gets automatically populated.
2. Value Added Tax return period
Information as to VAT Return Period, VAT Return Due Date, Tax Year-End, and VAT Return Period Reference Number.
3. VAT on sales and all other outputs
In this section of VAT Return, the taxable person has to provide information as to standard rated tax supplies in different emirates including Abu Dhabi, Dubai, Sharjah, Ajman, Umm al Quwain, Ras Al Khaimah, and Fujairah. Further, detail as to tax refunds provided to tourists under the Tax Refunds for Tourists Scheme should be provided. It is also necessary to provide information as to exempt supplies, zero-rated supplies, goods imported into the UAE, and adjustments to goods imported into the UAE.
4. VAT on expenses and all other inputs
In this section of Tax Return, you have to furnish information on standard rated expenses, and supplies subject to reverse charge provisions.
5. Net VAT due
This section requires furnishing information on the total value of due tax for the period, the total value of recoverable tax for the period, and payable tax for the period.
6. Additional reporting requirements
Additional reporting requirements are only applicable to taxable persons who have applied the provisions of the Profit Margin Scheme during the taxable period. Others may simply say tick ‘No’ and skip to the next section.
7. Declaration and authorized signatory
This section requires the taxable person to declare that information provided in the VAT return is factually correct, accurate, and complete to the best of his knowledge. Hence, utmost care should be taken while preparing the VAT filing. The taxable person has an option to save the draft tax return and submit it later.
Once the taxable person is satisfied as to the submitted information in the VAT Return, he can click on the Submit button and file the VAT return.
Care to be taken while filing a Tax return
Fill up information for all mandatory fields
Do not leave the amount fields empty. Enter ‘0’ if there’s nothing to declare.
Make sure to enter all the amounts in United Arab Emirates Dirham (AED) up to two decimal places
Double-check the accuracy and completeness of the information provided to avoid fines and penalties. You may use our UAE VAT Calculator to calculate VAT on Invoices.
Penalties related to VAT Return
If the taxable person fails to submit the VAT return within the specified timeframe, then he has to pay a penalty of AED 1000 for the first time and AED 2000 in case of a repeated failure within 24 months.
If the taxable person fails to settle Payable Tax as per the VAT return or Tax Assessment within the timeframe then,
2% of the unpaid tax becomes due immediately
4% of the unpaid tax becomes due on the 7th day following the deadline for payment
1% daily penalty is charged on any amount that is still unpaid one calendar month following the deadline for payment subject to a maximum of 300%.
If the taxable person files an incorrect tax return then,
A fixed penalty of AED 3000 for the first time and AED 5000 in case of a repeated failure
50% if the taxable person fails to make a voluntary disclosure or makes the voluntary disclosure after he is notified of the tax audit and the tax authority starts the tax audit process or after being asked for information relating to the tax audit whichever takes place first
30% if the taxable person makes the voluntary disclosure after being notified of the tax audit and before the authority starts the tax audit
5% if the taxable person makes a voluntary disclosure before being notified of the tax audit by the authority
If the legal representative for the taxable person fails to file a VAT return within the specified time, then the legal representative has to bear the penalties of AED 1000 for the first such failure and AED 2000 in case of repetition within 24 months.
FAQs:
1. I am a newly tax registered business. Is there any relaxation for me in filing VAT return?
As per the UAE VAT Laws, there is no such relaxation for filing VAT return. All VAT registered companies need to submit quarterly VAT returns on the 28th of the following month.
2. What are the different options available for payment of tax?
(i) One can settle Payable Tax using e-dirham or credit card (Visa and Master card only) (ii)Another option available is payment via e-debit. Here the payment is processed using retail or corporate banking channels of the taxpayer. (iii)One can also make a fund transfer via GIBAN number as provided by the FTA.
3. Can I file VAT return without settling the payable tax?
Yes, one can file VAT return without settling the payable tax, but he can not escape the late payment penalties.
4. Do I have to file my VAT return if I settle the payable tax on time?
UAE VAT Laws require a taxable person to file his tax return and settle the payable tax on time. If one fails to submit his VAT return on time, then he will be charged penalties.
5. I have come to know of mistakes in my tax return after submitting it to FTA. What should I do?
You need to file a Voluntary Disclosure in Voluntary Disclosure Form 211 to correct the mistakes if the net impact of VAT Payable or VAT Receivable is more than AED 10000. If the net impact of such a mistake is less than AED 10000, then you are not required to submit the Voluntary Disclosure Form. You can correct such mistakes or omissions in the subsequent VAT return.
6. Is it possible to generate a VAT return file from my accounting software and file VAT return with FTA?
Yes, one can generate a VAT return file, and file VAT Return with the FTA if the software is certified by the FTA.
VAT Consulting Service in UAE
N R Doshi & Partners provides a range of tax services, including VAT return filing services, VAT Consulting, and Tax Agent services in the UAE. Our service is coupled with insight and domain knowledge to help businesses remain compliant with the UAE Tax Laws. Contact us to know how our VAT Consultants in UAE can make you fully VAT compliant.
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