Businesses in the UAE must file VAT returns and make VAT payments by the deadline, typically the 28th day of the month following the tax period. Missing this deadline can result in significant penalties, including both fixed and daily charges. Engaging the expert services of “VAT Registration UAE” can help ensure compliance and timely payment of VAT.

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Vat Late Payment Penalty

VAT Returns must be submitted before the deadline, or a penalty of AED 1,000 will be assessed for delays that occur for the first time. If multiple violations occur within 24 months, the fine will be doubled to AED 2,000 for each violation. The FTA may share a tax assessment with an estimate of the owed tax for failure to file a VAT Return by the deadline. Upon the issuance of the tax assessment (where applicable), the Taxable Person will be required to pay any payable taxes assessed, penalties for failure to file a tax return, and late payment penalties.

Fixed Penalty

First Time Offense: AED 1,000
Repeated Offense (within 24 months): AED 2,000 per violation

Additional Penalties

2% of unpaid tax: Due the day after the payment deadline.
4% monthly penalty: Applied to the outstanding balance, starting one month after the due date.
1% daily penalty: Accrues from the day following the due date, up to a maximum of 300% of the unpaid tax.

Not sure what that means? Book a consultation with VAT expert.

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Avoiding VAT Late Payment Penalties

Businesses in the UAE must adopt the following best practices to prevent VAT late payment penalties:

Maintain Accurate Records: Keep your books up to date.
Stay Informed: Keep up with any changes in VAT laws and FTA requirements.
Timely Submissions: Ensure VAT returns are submitted and payments made on time.
Seek Professional Advice: Consult tax experts or VAT consultants for guidance.
Use Accounting Software: Invest in VAT accounting software or hire an accountant to assist with compliance.

Other VAT Penalties

Late VAT registration or de-registration
Failure to maintain financial records
Not submitting documents in Arabic when required
Filing incorrect VAT returns
Failing to issue tax invoices or tax credit notes
Non-compliance with FTA audit requirements

Read Also: Important Tips to Avoid VAT Late Payment Penalties In The UAE

Late VAT payments can affect your business’s profits very significantly. Therefore, it is always advisable to seek help from the VAT consultants in Dubai to ensure that you are making your VAT payments on time.

Consult “VAT Registration UAE“

Late VAT payments can significantly impact your business’s profits. Engaging a VAT consultant in Dubai can help ensure compliance and timely payment, avoiding hefty penalties. For expert services, contact VAT Registration UAE.

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For personalized assistance with VAT compliance and to avoid penalties, consult “VAT Registration UAE.” We are here to help ensure your business meets all VAT regulations efficiently.

Other Circumstances Leading to VAT Penalties

Violations of VAT accounting in the UAE include:

Late VAT registration or de-registration
Failure to maintain financial records (tax invoices and account books)
Not submitting documents in Arabic when required
Filing incorrect VAT returns
Late VAT payment
Late filing of tax returns
Submitting VAT Voluntary Disclosure for errors in tax refunds or returns
Failing to issue tax credit notes or alternative documents
Non-compliance with FTA audit requirements
Following incorrect tax formats
Failing to disclose errors in tax returns or refunds before a tax audit
Failing to account for tax on imported goods
Not notifying the FTA about applying tax based on the margin
Not complying with conditions for transferring goods in designated zones
Failing to issue tax invoices or alternative documents when making a supply
Not complying with conditions for electronic tax invoices and credit notes
Not displaying tax-inclusive prices on tax invoices

Also Read: VAT Fines And Penalties In UAE

How does VAT Accounting and VAT Filing affect businesses?

VAT accounting is a very thorough and intricate process for any business in UAE. In case of breach of VAT laws, businesses are subject to face heavy penalties and fines by the Federal Tax Authority of UAE. Therefore companies must stay in compliance with Federal Tax Authority in regard with VAT filing. It is also best to consult with a tax expert in UAE or partner with a tax consultancy firm for the ongoing tax accounting matters in the business.