Know Your VAT Return Period in UAE !
VAT Return Filing in the UAE
According to the provisions of the UAE VAT Law, a taxable person is responsible for VAT Return Filing in the UAE within 28 days from the end of the tax period. VAT Return Filing can be submitted online in the Federal Tax Authority (FTA) portal online. The Form used for VAT Return Filing is called Form VAT 201.
What is the VAT Return?
VAT Return in the UAE must be submitted by the taxable person for the specific tax period detailing about the output tax payable Tax incurred on sales) and the input tax (Tax incurred on purchases) recoverable. So overall it shows the tax liability.
If the output tax payable exceeds the input tax to be claimed, then the difference must be paid to the FTA. Similarly, when the business has input tax to be recovered more than the amount of output tax, then the balance can be claimed back from the authority or can be kept for setting off the future liabilities.
Who should file VAT Returns in the UAE?
Every VAT registered person must submit the VAT Return before the due dates. VAT Registration in UAE can be obtained either on a mandatory basis or voluntary basis based on the taxable turnover of the applicant. VAT registration is not mandatory if the taxable supplies do not exceed AED 375,000/- for the previous 12 months. Based on the registration, the businesses or any taxable person will have to file the VAT return either quarterly or on monthly based on the tax period approved by FTA.
VAT Return Period
VAT Return period is the specific duration for which the tax is calculated and paid. The standard tax period will be for 3 months and sometimes some businesses may be required to file on monthly basis.
The VAT return must be submitted within 28 days of the end of the tax period. Failure to file the returns within the tax period will lead to administrative penalties as per the provisions of Cabinet Resolution No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.
What is the information to be provided in the VAT Return Form 201?
Since the VAT Return Form, 201 is prepared by the taxable person or his Tax Agent based on the transactions conducted during the tax period, it can be considered as self-assessment or self-evaluated return. The following information’s are to be provided in the VAT return Form 201:
- Standard rated supplies, those supplies that are taxable at the rate of 5%. Generally, these supplies may be made within the UAE and have to be reported in the Emirate in which the fixed establishment closely connected to the supply is located.
- Tax Refund to tourists: Only If the business is registered under the Tax refund for tourist scheme or else no it can be put as NIL
- Supplies subject to Reverse charge mechanism: This include taxable services received from foreign suppliers as well as goods which are not declared in UAE customs.
- Zero Rated supplies: Only the taxable supplies which are taxed at zero rate for VAT in UAE need to be disclosed here. It includes export of goods and services outside UAE, supply of educational services, preventive and basic healthcare services and supply of crude oil and natural gas.
- Exempt Supplies: If in case the business has any supply of certain financial services, bare land, local passenger transport & subsequent supply of residential building after the first supply will be exempt from VAT. These are the supplies which are considered as exempt supply in UAE VAT Law.
- Import of goods into the UAE: All imports that are declared through the UAE customs needs to be disclosed in the VAT Return. However, the value gets auto-populated as the customs registration number will be linked to the TRN number. But if any of the import is not auto-populated or if there is an error or change in the data disclosed, adjustment for the same can be done in the box. No 7 Adjustments to goods imported into the UAE.
- Standard rated expenses: These are the goods and services purchased from VAT-registered suppliers in the UAE, that were subject to VAT at the rate of 5%. It is also important to ensure that the input VAT claimed are recoverable expenses as per the UAE VAT Law.
- Payable tax: The total amount of output tax payable less the input vat recoverable will be the payable tax.
If there is a refund, either can be carried forward to the future liabilities or can apply for a refund.
One important point one must note that If there is no business transaction for the tax period, you are required to submit NIL returns within the due date.
VAT Return Penalties
In case of any delay in filing the VAT Returns, AED 1,000 penalty will be imposed for the first-time delay. If the delay is repeated within 24 months, the penalty will be AED 2,000 per return.
Also, after submission of the VAT Returns the payable tax must be settled immediately. If the amount is not paid on time it will lead to further penalties as follows:
- 2% of the unpaid tax immediately
- 4% charged on the seventh day if the amount is still not paid
- 1% daily charged on the amount that is unpaid over one calendar month following the deadline of payment with an upper ceiling up to 300%.
VAT Return filing services in the UAE
We offer Complete assistance for guidance and support of VAT Return in accordance with the provisions of UAE VAT Law.
We Emirates Chartered Accountant Group can visit your office monthly or quarterly basis and review the documents like the invoices and contracts and will be assessing the VAT procedures adopted by the company to identify non-compliances if any.
We will advise you regarding the taxability on the transaction whether it is standard rated, zero-rated or exempt category. Guidance if required on input VAT recovery and VAT administrative procedures like voluntary return submission, Reconsideration, clarification etc. will be given during the assignment.
VAT Return filing requires accurate identification of the taxability of transactions. Further proper care must be taken while reporting the transactions like claiming of input properly as well as correctly disclosing the output VAT. We can advise you on all procedures and can check if your business has reported VAT properly or not. Further, wherever we identify any non- compliance or any discrepancy, we will report it to the management and guide you on the proper compliance.
Looking for TAX Services in the UAE? We provide:
- Tax Agent’s Service
- Pre – Tax Audit
- VAT Return Filing
- VAT Implementation
- VAT Registration
- Excise Tax Registration
- VAT Deregistration
|For Tax Services in Dubai:
Mr. Pradeep Sai
+971 – 556530001
|For Tax Services in Abu Dhabi:
+971 – 558892750
|For Tax Services in Northern Emirate (Sharjah, Ajman, RAK, Fujairah)
+971 – 508873115