What to Do If You Miss a VAT Payment in the UAE

VAT is a very important component of the taxation system in the UAE. As a business, you are required to register your business for VAT. Once registered, you must follow all the FTA rules and regulations, including paying your due VAT amounts on time. Missing a VAT payment in the UAE can result in fines and penalties. This article will explain in detail what needs to be done if you miss a VAT payment in the UAE. “VAT Registration UAE” are reputable Tax Consultants in Dubai with a team of VAT experts who can help you ensure timely payment of due VAT and avert incurring penalties and fines for noncompliance.

VAT Penalties for missing a VAT payment

VAT Returns must be submitted before the deadline, or a penalty of AED 1,000 will be imposed for delays that occur for the first time. If repeated violations occur within 24 months, the fine will be doubled to AED 2,000 for every infraction.

The FTA may issue a tax if you fail to file a VAT Return by the deadline. Assessment made to you together with a projected tax liability. In this situation, you may be required to pay the penalty for failing to file a tax return, obligation to pay any owed taxes upon the issuance of the tax assessment, and late payment penalty (where applicable).

The Taxable Person shall pay the penalty for late payment of the payable tax up to a maximum of (300%) in accordance with the following.

  • Once the payment of the payable tax is past due, 2% of the unpaid tax is due the day after that date.
  • A monthly penalty of 4% will be applied to the outstanding balance on the same day every month starting one month after the payment is due.

To understand further the consequences of late VAT return payments in the UAE, you must consult the VAT consultants in the UAE for any clarification and help.

What to do if you miss a VAT payment in the UAE?

Below are some solutions for VAT late payment which can assist Taxable Persons avert penalties:

  1. Pay the outstanding amount to the Federal Tax Authority immediately- once you know that your VAT payment is missed, you can pay it immediately through the FTA’s e-Tax portal or another FTA-approved payment method; you can pay VAT online.
  2. Calculate the amount of VAT due and the late payment penalty- As explained above, the taxpayer must calculate the penalty to be paid along with the due VAT amount. The penalty can be calculated as follows:
    1. 2% of the outstanding tax is required right now.
    2. On the seventh day following the payment deadline, 4% of the unpaid tax is due.
    3. Any outstanding amount one calendar month after the payment deadline will incur a 1% daily penalty, up to a maximum of 300%.
  3. Paying the penalty: The FTA’s e-Tax portal or one of the FTA’s accepted payment methods are options for making the late payment penalty payment.
  4. Send in a voluntary disclosure. Contact the FTA and make a voluntary declaration if you still need to pay VAT. You can declare the missed payment in this way to avoid extra fines. Through the FTA’s e-Tax platform, you can submit a voluntary disclosure online.

The FTA also provides a provision for paying the VAT penalty in instalments. If you cannot pay the VAT late payment penalty in the UAE in full, you can request a payment installation plan from the FTA. This can be done by filling out and submitting the relevant application form along with the necessary documentation.

Steps to avoid missing a VAT payment penalty in the UAE

Here are some tips to avoid VAT late payment penalty in the UAE-

  • Create a calendar reminder to submit your VAT return and payment on time. Creating a calendar for the VAT payments and reminders in your system will help you make your dues payment in time, saving a lot of time and money.
  • Utilize accounting software to keep track of your VAT payments and liabilities- There are many accountings software available. They can be installed in your business systems to ensure that the VAT calculations are done precisely and that you make your due VAT payments on time.
  • Contact the FTA for advice if you have any questions or concerns about your VAT duties. FTA will help you understand your obligations and deadlines and provide all the necessary means to stay updated with the latest laws and procedures regarding VAT.

Also, you can always consult the VAT consultants in the UAE for any help needed for VAT registration and payments. They are well updated with the taxation rules and regulations of the UAE and can help you significantly in handling your VAT related matters swiftly.

Read More: How to Avoid VAT Late Payment Penalties in the UAE?

Seek the Expert Services of VAT Registration UAE

Taxable Persons are advised to seek the expert services of trusted Tax Consultants in UAE to effectively meet VAT payment requirements timely and to ensure compliance with VAT regulations and standards. VAT Registration UAE, is a trusted interface for all VAT issues, committed to furnishing businesses tailored tax services and solutions. Thus, contact us today and we shall be glad to assist you.