Tax Service in UAE
The Federal Tax Authority (FTA) has introduced a form 211 – VAT voluntary disclosure form recently. It will help the taxable persons to rectify the errors they committed in their UAE VAT Form 201 which is already filed. It is an option given by the FTA for the tax periods to voluntarily disclose the errors one has committed.
Every Taxable person has an option to rectify the contents of the VAT Return (Form 201) which were already filed. By using the voluntary disclosure option, the taxable person can rectify the amount of tax disclosed by him previously. One can use the form 211 – VAT voluntary disclosure to inform the authority and rectify the same voluntarily before the authority finds it before a tax audit or through an assessment.
Once the taxable person identifies the error or omission he made in his previous VAT return form 201, he can log in to the official portal of FTA by using their user name and password and access the VAT voluntary disclosure form 211 to rectify.
As shown in the above screen shot, the taxable person can select the respective periods wherein a voluntary disclosure is required by clicking the button submit form 211 to rectify the mistakes.
If a taxable person makes an error or omission or a wrong treatment of tax by which the output tax payable or input tax recoverable is more than AED 10,000/- for a particular period then, he must use the VAT Voluntary Disclosure form 211 to inform the authority. The form will show the original figures disclosed under “as reported” and will give an option to edit the amount under separate box named “as the current”. Further, the reason for such discrepancy also should be disclosed.
Once the newly arrived figures are written in the respective boxes under “as current”, the total tax liability under box number 14 also gets changed. This will be the actual tax liability to be paid to the authority. Further, the taxable person should also upload the supporting documents for such voluntary disclosure. It includes a letter describing the background of the facts and a detailed description of the errors disclosed, the reason for voluntary disclosure as well as the impact on the relevant boxes of the tax return.
if the taxpayer uses the VAT Voluntary Disclosure form 211 for the first time, AED 3,000/- shall be levied. For every repetition in using the VAT Voluntary Disclosure form 211 AED 5,000/- shall be charged.
if the taxpayer discloses less than the actual tax liability in the return and subsequently uses Form 211 VAT Voluntary Disclosure form, the percentage-based penalty will be as follows:
If a taxable person makes an error or omission or a wrong treatment of tax by which the output tax payable or input tax recoverable is less than AED 10,000/- for a particular tax period, then he need not use the VAT Voluntary Disclosure form 211 to inform the authority. He can rectify such errors in the subsequent VAT Return without a separate disclosure.
ABC LLC is a company registered in Dubai and the tax paid is 1st January 2018 to 31st March 2018 and quarterly thereafter. For the first quarter, the total sale was AED 10,000,000/- out of which 3,000,000/- was an export and the balance 7,000,000/- was standard rated supply. The total output VAT is AED 350,000/-. Recoverable input tax under standard rated expenses (5,000,000/-) was AED 250,000/-. Hence, net tax payable is AED 100,000/-.
Suppose, ABC LLC wrongly filed their VAT Return Form 201 - AED 6,000,000/- as 5% taxable supply and AED 4,000,000/- as export. In this case it will be showing AED 50,000/- as net tax payable to the authority.
Every taxable person should file their VAT Return with optimum precision within the time frame specified by the UAE VAT Law which is within 28 days from the end of each tax period. A taxable person should ensure that the VAT Return Filing is processed in a correct manner, so as to limit the frequency of using the VAT Voluntary Disclosure Form 211 to avoid penalties.
Emirates Chartered Accountants Group assures best VAT Return Filing Services across UAE. Our Tax Executives can support you by visiting your premises for compliance and compilation of your VAT Return by making sure that your VAT Returns are filed correctly and within the due date.
Mr. Pradeep Sai
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