Do you have questions about VAT return in UAE? In this article, you’ll find all the essential information about the VAT return process in the UAE.
What Is VAT Return?
At the end of each tax period, a tax registered person must submit a VAT return to the FTA. It is a report that summarises the value of the supplies and purchases a taxable person has made during the tax period and shows the taxable person’s VAT liability.
A tax return is a written statement that is submitted periodically. It states the details and calculations of tax liability or refund that are to be paid to or received from tax authorities.
The VAT liability is the difference between the output tax that was received during a certain tax period (i.e., VAT charged on supplies of goods and services) and the input tax, which was paid to suppliers of goods and services and is recoverable from the FTA for the same tax period (i.e., VAT incurred that can be recovered on purchases).
If the output tax exceeds the input tax amount, you must pay the difference to the FTA. And if the amount of input tax exceeds the amount of output tax, a taxable person will have excess recoverable input tax. Then that person will be able to set it off against subsequent payments due to the FTA or get a refund from the FTA.
VAT Return Filing
So how can you file a VAT return? VAT return filing must be done online through the FTA portal: eservices.tax.gov.ae. But before you file the VAT return form on the portal, you should make sure you have met all the tax return requirements.
Taxable businesses must file VAT returns with FTA on a regular basis. Usually, they must do it within 28 days of the end of the tax period defined for each type of business. A tax period is a specific time for which the payable tax must be calculated and paid. It differs for businesses of different sizes.
- If a business has an annual turnover below AED150 million, the standard tax period is every quarter.
- If a business has an annual turnover of AED150 million or more, the standard tax period is every month.
If you fail to file a tax return within the specified time frame, that will make you liable for fines as per the provisions of Cabinet Resolution No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.
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UAE VAT Return Format
The details and data that must be included in the VAT return for the purpose of tax are specified in the UAE VAT executive regulations. All the details that are required for VAT Return must be prepared in accordance with the UAE VAT Return format issued by the authority.
The VAT return form is at a summary level or a consolidated level. The registered person has to enter the following consolidated details of total supplies:
- both purchases and sales
- output VAT collected on supplies
- eligible input VAT paid on purchases
- the total tax due.
The form also includes details about the name, address, and tax registration number (TRN) of the registrant as well as the VAT Return period and the due date of submission and the tax period. These details are applicable to all VAT registrants and are pre-populated in the online form. In addition to the above-mentioned information, the return format also consists of other additional details:
- Supplies subject to reverse charge provisions
- Zero rated supplies
- Exempt supplies
- Goods imported into the UAE
- Profit Margin Scheme applicability
- Tax Refunds for Tourists Scheme
The registrant may save the online form as a draft and when all the required information has been satisfactorily entered, they may submit the form by clicking the “Submit” button.
How to Submit VAT Return in UAE
As we have already mentioned, VAT returns must be filed electronically through the FTA portal. A taxable person can submit the form themselves or delegate this right to another person who will do it on the taxable person’s behalf. That can be a tax agent or a authorized representative.
So how to submit a VAT return in UAE? To access the VAT return form, you should login to the e-Services portal using your registered username and password. Then you will need to navigate to the option to open your VAT return and fill in all the required details. When you finish, you have to click Submit. After submitting the return, you will receive an e-mail from the FTA confirming the submission of the VAT return form. Finally, you have to pay the due tax.
Dealing with VAT is a tedious, complex, and a rather time-consuming process. And you should remember that taxable businesses should keep their books in a well-organized manner to avoid penalties.
If you find VAT return too challenging, you may need professional guidance.
Contact us to schedule a free consultation to discuss how we can help you to establish a VAT-compliant accounting system.
VAT Return in UAE: Learn How We Can Help You
Beaufort Associates can help you to manage VAT obligations for your business in UAE. You can rely on our team during every stage of the VAT return process. We can advise you on your reporting deadlines to ensure you can avoid fines and penalties. Our highly-qualified and experienced consultants will work with you to prepare your VAT tax returns and arrange the VAT return filing with FTA on time. If you need professional guidance and support with managing the VAT aspects of your business in UAE, please contact us any time.
