VAT Return Filing in UAE | Latest Updates on UAE VAT Return Filing
Presently the VAT Return Filing Period for most of companies are on a quarterly basis and for businesses having a higher turnover is having their VAT Return Filing period on a monthly basis. The Federal Tax Authority (FTA) is now planning to change the VAT Return filing period on a half-yearly basis. The decision shall be taken by next month (November 2018) on certain categories of businesses and few companies will be eligible for the same.
Can you change your VAT Return Filing Period?
As per the existing provisions of the law in case you are looking to change your VAT return period you can request the FTA to change the VAT Return period.
Value Added Tax (VAT) Returns User Guide on Tax Period states that “Where a Taxable Person is assigned the standard Tax Period, he may request that the Tax Period ends with the month as requested by him, and the FTA may accept such a request at its discretion.”
What is the latest update on the VAT Return Filing period?
Khalid Ali Al Bustani, Director-General of the Federal Tax Authority (FTA) said that the introduction of a new bi-annual tax period from next month (November 2018) for some sectors of businesses will be started.
With the introduction of this new bi-annual vat return period from next month, businesses with low turnovers, commercial real estate owners, and board members are likely to fall under this new bi-annual vat return period. Businesses who are entitled to fall under this system will be updated with the procedures of their new tax periods.
The Federal Tax Authority (FTA) is in sync with the concerned establishments with regard to developing an electronic link system to simplify the system of pay taxes for the real estate sectors.
During a tax meeting which was attended by Jaber Mohammed Ghanem Al Suwaidi, General Director of the Crown Prince Court of Abu Dhabi, and officials of the concerned departments of implementation of the tax system in the UAE, Khalid Ali Al Bustani, director-general of the Federal Tax Authority (FTA) gave a thorough description on the taxes that are applicable in the UAE, which is Value Added Tax (VAT ) and Excise Tax.
The UAE Cabinet Decision has enforced VAT return periods to businesses who have registered under the tax system and their VAT returns are to be submitted to the Federal Tax Authority (FTA) within the time, which is within the 28th day of a tax period.
Khalid Ali Al Bustani, director-general of the Federal Tax Authority (FTA) has advised all the businesses registered for VAT to submit their VAT returns and pay the taxes to the authority on time before the due date. The registered businesses are advised to submit their periodic VAT returns on their VAT Return period dates even if the value of their supplies during the tax period is equal to zero.
Businesses are advised not to wait till the last day to proceed with the VAT return payments which might cause delay while processing payments resulting in late payments and inviting fines.
Source ~ Khaleej Times
What happens when you don’t file your VAT Return on time?
As strictly advised by the Federal Tax Authority (FTA) on the VAT Returns of your businesses that are to be submitted well before the due date.
If you miss you file your VAT Return for the first time, a penalty of AED 1,000/- will be charged for the delay. If you miss filing your VAT Returns on a consequent basis within 24 months, the penalty will be increased to AED 2,000/- for each offence.
The Federal Tax Authority (FTA) (can issue a Tax Assessment if you do not submit your VAT Returns on the specified VAT periods. If they conduct a Tax Assessment you may be obliged to pay any payable tax that has been assessed, penalties for non-submission of the tax return and late payment penalties once the tax assessment has commenced.
What does VAT Penalty consist of?
If you fail to file your VAT Return on time or before the due date, a late payment penalty would consist of the below:
- 2% of the unpaid tax is immediately charged once the payment of Payable Tax is delayed.
- 4% is due from the seventh day of the deadline for payment, on the tax amount which is still not paid.
- 1% will be the daily penalty charged on any amount that is still unpaid for one calendar month.
If you are planning to deregister your company; how will you file your last VAT Return?
If you are looking to deregister your company, application for “De-registration” must be submitted to the authority initially. Once your application to cancel your VAT registration is approved by the authority you will be informed about the effective date of de-registration and your last VAT Return Filing period will also be known.
Generally, business have to file their final VAT Return for their last Tax Period for which they are registered for VAT purposes; upon approval of de-registration from the FTA, the Tax Period and the submission due date of the final VAT Return will be communicated by the FTA;
The final VAT Return has to be completed for the respective Tax Period and submitted to the FTA in accordance to the same provisions and procedures as any other VAT Return.
When you are finally filing your last VAT Return, you are required to calculate and account for output tax on any goods and services forming a part of your business assets (including capital assets and inventories) that you have held on hand as at the last day of your VAT registration and for which you have recovered input tax.
Emirates Chartered Accountants Group houses a wide range of TAX Services for all business sectors in the UAE – Dubai, Abu Dhabi, Sharjah, Ajman, Fujairah, & Ras Al Khaimah. The Tax Team in Emirates Chartered Accountants Group engages professionals with relevant TAX experience in different sectors of business hailing from different ends of the globe.
If you are looking for any support for VAT Refund from the FTA, our tax agent or specialized tax experts will help you claim the refund.
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Feb 29,2024UAE Corporate Tax Registration
