VAT return filing is a statutory compliance for businesses registered under the Value Added Tax (VAT) system in UAE. It means reporting to the Federal Tax Authority (FTA) the VAT collected on sales (output tax) and the VAT paid on purchases (input tax). This is to ensure that businesses account accurately for the VAT that they owe or are to reclaim and comply with the tax regulations of the UAE.
Who Needs to File a VAT Return in the UAE?
In the UAE, the obligation to file VAT returns applies to:
- Taxable Persons: Any individual or entity conducting business in the UAE that is registered or required to register for VAT. This includes:
- Businesses with taxable supplies and imports exceeding the mandatory registration threshold of AED 375,000 per annum.
- Businesses that opt for voluntary registration with supplies and imports below the mandatory threshold but above the voluntary registration threshold of AED 187,500 per annum.
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Even if a registered business has not conducted any taxable transactions during a tax period, it is still required to submit a ‘nil’ VAT return to the FTA. The standard tax period is:
- Quarterly for businesses with an annual turnover below AED150 million
- Monthly for businesses with an annual turnover of AED150 million or more.
The FTA may, at its choice, assign a different tax period for certain type of businesses.
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VAT Return Filing Process in UAE
Filing a VAT return in the UAE involves several key steps:
- Access the FTA e-Services Portal: Use your credentials to access the portal of FTA e-Services (through the FTA portal eservices.tax.gov.ae) to log in. Go to the VAT section and click VAT 201 – New VAT Return to begin filling the return.
- Complete the VAT Return Form (VAT 201): Fill in all the necessary information accurately as follows:
- The sales and all other outputs as well as expenses and all other inputs as follows:
- The net amounts excluding VAT.
- The VAT amount.
- The system will then calculate the payable or refundable tax.
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Make sure that all amounts are precise and supported by relevant documentation.
- Review and Submit: Carefully review all of the information entered on the form after completing all mandatory fields and confirming the declaration. Once you confirm that all of the information included in the VAT Return is correct, click on the Submit button.
- Make Payment: If the return indicates a payable amount, proceed to the ‘My Payments’ section on the FTA portal to settle the tax due. Payment methods include:
- E-Dirham or Credit Card: Immediate online payment through the portal.
Bank Transfer (GIBAN): Transfer funds using the unique Generated International Bank Account Number assigned to your account.
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Documents Required for VAT Return Filing in UAE
- Sales Invoices: Tax invoices issued to customers, Credit notes issued for discounts/returns
- Purchase Invoices: Tax invoices received from suppliers, Credit notes received from suppliers Like This
- VAT Calculation: Total Output VAT (Sales VAT), Total Input VAT (Purchase VAT), Net VAT Payable/Refundable
- VAT Ledger & Accounting Records: Sales & purchase ledger, VAT account statements, General ledger entries
- Bank Statements: Monthly bank transaction records
- Import & Customs Documents: Customs declarations, VAT payment receipts (Reverse Charge Mechanism – RCM)
- Business Expense Reports: Rent & utilities invoices, Advertising & marketing invoices, Office supplies invoices
- Export Documentation: Shipping documents (Bill of Lading, Airway Bill), Customs declarations
- Tax Registration Number (TRN) Certificate: FTA-issued VAT registration certificate
- Adjustments & Corrections: Corrections to previous VAT returns
- FTA VAT Return Form (VAT201): Online VAT201 form submission on FTA portal
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VAT Return Filing Deadlines and Penalties
Filing Deadlines
VAT returns must be filed, and any due tax paid, within the 28th day of the month following the end of each Tax Period (or on the next working day if the normal due date falls on a national holiday or weekend).
A ‘tax period’ is a specific period of time for which the payable tax shall be calculated and paid. The standard tax period is:
- Quarterly for businesses with an annual turnover below AED150 million
- Monthly for businesses with an annual turnover of AED150 million or more.
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The FTA may, at its choice, assign a different tax period for certain types of businesses.
Penalties for Late VAT Payments
| Violation | Penalty |
| Failure to submit the Tax Return within the specified timeframe | - AED 1,000 for the first time
- AED 2,000 for repetition within 24 months
|
| Failure to settle the Payable Tax stated in the Tax Return, Voluntary Disclosure, or Tax Assessment within the specified timeframe | Penalties for late payment of Payable Tax up to a maximum of 300%: |
| 2% of unpaid tax due on the day following the due date of payment |
| 4% monthly penalty due after one month from the due date and on the same date monthly thereafter on the unsettled Tax amount |
| Due date of payment in the case of Voluntary Disclosure | 20 business days from the date of submission |
| Due date of payment in the case of Tax Assessment | 20 business days from the date of receipt |
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Benefits of Professional VAT Return Filing Services
VAT return filing services in the UAE offer several benefits for businesses:
- Compliance Assurance: To make sure that your business is in compliance with the UAE VAT laws and regulations, and to avoid penalties and discrepancies.
- Time-Saving: To allow you to concentrate on your core business operations while VAT filing complexities are handled by experts.
- Error-Free Filing: To minimize errors in calculations or documentation and to provide for accurate returns every time.
- Refund Maximization: To identify potential for claiming VAT refunds and to reduce the amount that is payable where applicable.
- Expert Insights: Offers professional advice on VAT planning and compliance to help streamline your operations.
- Audit Support: Helps with VAT audits and queries from the Federal Tax Authority (FTA) to make it a smooth and stress free process.
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Why Choose Our VAT Return Filing Services in UAE?
- Expertise: We have been in business for over 35 years. Our VAT experts have in-depth knowledge and understanding of the UAE VAT laws and regulations.
- Comprehensive Services: We provide a number of tax related services which include VAT registration, filing, refund claims, and advisory services.
- Accuracy: We have a very precise approach to VAT returns, which means that there are no chances of making errors that may attract penalties.
- Time Efficiency: We take care of all the VAT related tasks, this leaves you to concentrate on the other aspects of your business.
- Audit Support: Our VAT Consultants help in case of VAT audits and any questions from the Federal Tax Authority to make it a smooth process.
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How to Get Started with Our VAT Return Filing Services in UAE?
To begin with, our VAT return filing services in the UAE, you can follow the following steps:
- Contact Us: You can contact us through our website or call our sales team to explain your VAT filing needs.
- Consultation: Set a meeting to explain your business needs and how we can meet them.
- Documentation: Please make sure to provide all the documents needed for the process, which include sales and purchase records, invoices, VAT registration details, and other relevant documents.
- Service Agreement: Sign a service agreement which includes the scope of services, fees, and terms of engagement.
Filing Process: We will prepare and submit all your VAT returns to the relevant authorities and make sure that they are in accordance with the UAE VAT laws and are submitted on time.
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Frequently Asked Questions
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