VAT Filing in UAE
VAT Return filing is the official tax report a registered business has to submit to the Federal Tax Authority before the due date. It is to be done by the taxable Person at regular intervals in compliance with his/her tax period. The VAT Return Filing Form records the details of the output tax due and the input tax to be recovered and some other information essential in the format. VAT return filing is not just proof your business existence but can safeguard your business providing legal assurance and advantages in the stage of tax payments, avoiding financial loss. CDA offers VAT return filing services in Dubai and across the UAE delivering outstanding VAT services to help you grow your business.
The VAT return form ‘VAT 201’ is available in the FTA portal. You can log in to this portal using your password and registered username.
Tax Period for VAT Return Filing as per FTA
- VAT Return Filing in Dubai is to be done by no later than the 28th day of the month following the Tax period or by another date if demanded by the FTA.
- If any payment is due, it must be received by the FTA by the same deadline.
- If any payment is due, it should also be paid by the same deadline.
- If the due date comes on a weekend or a national holiday, the deadline is extended to the next business day.
- The standard Tax period for a Taxable Person is a period of three calendar months.
- The FTA may assign different tax Periods for a certain group of Taxable Persons.
- In certain cases, the tax period may be fixed on a monthly basis.
- The request for an extension of the tax filing period may be accepted by the FTA at its discretion.
A penalty of AED 10,000 will be imposed on an individual or business who fails to keep proper records of the transactions made. In the case of repetitive non-compliance within 24 months, the penalty will be increased to AED 2,000 for each offence.
Things to be taken care while filing your VAT return
When you do the VAT Return filing in Dubai, your details like your name, your address, TRN, current VAT Return Period, Tax year-end, VAT return period reference number, VAT Return submission due date will be generated automatically.
At the same time, the following things are to be noted down: -
- The payable amount must be in UAE Dirhams (AED).
- The payable amounts should be rounded off.
- Fill all the mandatory fields
- If there is no amount to be stated, enter ‘0’(Zero)
- Provide details of taxable supplies as emirate wise
The importance of accurate and timely VAT Filing
- Avoids penalties
- Reimbursement of input tax
- Reimbursement of tax on import of goods through the Reverse Charge Mechanism
- Reduces or zeroes the risk of errors in VAT filing
- Increases the credibility of the business in the market and enhances the goodwill
Particulars to be furnished under Taxable Supplies
- For Standard Rated Supplies
Include the following details for standard-rated supplies: -
- The sales of goods and services subject to VAT
- Sales of goods and services at a discounted rate (after deducting the discount value)
- Deposits received as part payment
- Inter-company sales (if you don’t have a Tax Group registration in place)
- The sale of business properties
- Deemed supplies, which are above the relevant limits
- Reimbursements of expenses from customers (Recharges)
- The full value of goods sold under the profit margin scheme
- Sales of goods located within Designated Zones where the goods are spent within the Zone
- Reductions in value due to credit notes issued
- Errors that are allowed to correct for previous Tax Periods.
The following things should be excluded: -
- Sales of goods located within designated zones and not consumed within the designated zone
- Out of scope supplies
- Zero-rated supplies, such as exports of goods or services outside the UAE
- Zero-rated educational services
- Zero-rated healthcare services
- Standard Rated Expenses (Purchase of Goods & Services)
Include the following details for standard-rated expenses: -
- Goods or services purchased for business purposes from VAT-registered suppliers that were subject to VAT
- Goods or services which were purchased at a discount
- The total price that you have paid for the goods purchased, which you are selling under the profit margin scheme
- Goods or services purchased before your tax registration and for which you wish and are able to claim the tax incurred. The claim must be made in your first VAT return
- Reductions in value due to credit notes received from suppliers
- Errors that you are allowed to correct for previous tax periods.
The following things should be excluded for standard-rated expenses: -
- Exempt or zero-rated purchases
- Expenses which were incurred to make exempt or non-business supplies
- Purchases of goods located within designated zones which were not consumed in the designated zone or subsequently imported into the UAE mainland
- Purchases from members of the same tax group
- Fines and penalty charges received e.g. Traffic fines
- Wages and salaries
- Expenses where the input tax is specifically disallowed
Include the following details for Zero-rated supplies: -
- Exports of goods and services outside the UAE.
- Local supplies of certain educational services and related goods and services
- Local supplies of certain healthcare services (e.g. preventive and basic healthcare services and related goods and services)
- Supplies or imports of investment precious metals
- Supplies of crude oil and natural gas
Include the following details for Exempt rated supplies: -
- Local supplies of certain financial services
- Supplies of residential buildings through sale or lease, other than the ones subject to the zero rates of VAT
- Supplies of bare land
- Supplies of local passenger transport
- Supplies Subject to Reverse Charge
- Services received from foreign suppliers which are subject to the standard rate of VAT
- Services received from foreign suppliers which are subject to the zero rates of VAT
- Goods received which are subject to the reverse charge provisions and have not been declared to UAE customs
- Local supplies subject to the reverse charge
- Imports of goods into the UAE through UAE customs that have already been reported in your customs declarations
- Imports of goods from agents on behalf of an unregistered person
Some important points to be noted down:
- Name of the Form to file VAT Return is VAT 201
- Name of the Form to claim Input refund is VAT 311
- If there is no business transaction for the Tax Period, you are required to submit a “nil” VAT Return by the respective due date
- Once the date of the supply has taken place, the Taxable Person must account for the output tax in the VAT Return covering that Tax Period
- Supplies within Designated Zone, out of scope supplies and disbursements are not required to be reported in the VAT return
- It is possible to make adjustments in the pre-populated VAT amount on import of goods in case there is any error at customs end
- Failure in the payment before the due date would result in a late payment penalty consisting of:
- (2%) of the unpaid tax immediately levied once the payment of Payable Tax is being late
- (4%) is due on the seventh day following the deadline for payment, on the amount of tax which is still unpaid
- (1%) daily penalty will be charged on any amount that is still unpaid for one calendar month following the deadline for payment with an upper ceiling of (300%)
Once the process of entry is completed in the VAT Return Form, the net amount payable will be automatically calculated. If the payable value is negative, you can either request for a refund or you can carry forward the amount for the next Tax period.
CDA’s Role in VAT Return Filing
CDA VAT Return Filing Services in Dubai and UAE are tailor-made to meet the demands of our clients. We understand your business dealings, keep transparency in very processes, manage to lower your expense, and finally maximise your profit with better accounting and tax procedures. We visit our client’s office on a periodical basis and collect the necessary documents for VAT Return Filing.
- Better guidance and support for your VAT Return in line with the provisions of the UAE VAT law.
- Proper training to the employees.
- Error-free VAT filing with proper back up of accounting.
- Document the supporting documents related to each tax filing.
- Help to have proper tax planning.
Through our skilled team, we also provide quality consultancy services to the business world in the field of CFO Services, Auditing Services, Accounting & Bookkeeping Services, Due Diligence Services and Accounting Software services in Dubai.
If you have any doubts regarding the VAT Return Filing in Dubai or about your current business, feel good to discuss with us. CDA is there for your care!
Our experts will give you one-hour Free Consultation to keep your uncertainties away!
Frequently Asked Questions [FAQ]
1. What is the due date to submit VAT return in UAE?
The last date to file VAT return is on or before the 28th day of the month, subsequent to the end of the concerned tax period. If the 28th day falls on a Friday or Saturday or on a national holiday, the due date would be the following first business day.
2. I supply goods which are taxable at 5% VAT and export goods to different countries. How should I declare the details in the VAT return form?
The VAT return form has separate columns for both standard-rated supplies (5% VAT) and zero-rated supplies.
In your case, the 5% taxable supplies will be included under the ‘Standard Rated Supplies’ pertaining to your emirate and exports generally under ‘Zero-Rated Supplies’. Also note, there are conditions to be met if the exports are to be considered at zero-rate VAT.
3. My input tax amount is more than the output tax. How will I adjust and declare in the VAT return?
In the above case, it will result in VAT refundable. You can opt for either option:
a. Carry forward the refundable amount to the next VAT return period
b. Claim refund – FTA would require 20 working days on submitting the application
4. What will be the consequence of not filing the VAT return?
This violation will lead to administrative penalties levied by the authority.
5. If I don’t have any sales and purchases during the tax period, what should I do?
If there are no business transactions for the concerned tax period, you are required to submit a "NIL" return on or before the due date, to avoid administrative penalty.
6. Who is liable for monthly and quarterly returns submission?
Large taxpayers are liable for monthly returns as well as small and medium taxpayers are required to submit quarterly returns.
7. What is an advantage for a company to register for VAT?
Being a VAT registrant, businesses can claim the VAT paid on expenses or purchases.