Businesses registered for VAT (known as taxable persons) are required to submit a VAT return to the Federal Tax Authority (FTA) at the conclusion of each tax period.
The VAT return provides a summary of the value of supplies and purchases made by the taxable person during the tax period, reflecting their VAT liability. The VAT liability is determined by calculating the difference between the output tax payable (VAT charged on supplies of goods/services) and the input tax (VAT collected on purchases).
If the output tax exceeds the input tax, the taxable person must pay the difference to the FTA. Conversely, if the input tax exceeds the output tax, resulting in a surplus, the taxable person can offset this amount against future VAT payments to the FTA.
The filing of VAT returns must be done online through the FTA portal on the Emaratax Platform. Before submitting the VAT return, it is essential to ensure that all tax return requirements have been met.
Timely filing of VAT returns is crucial, and taxable businesses must generally submit their returns to the FTA within 28 days after the end of the designated ‘tax period’ specific to each business type. The tax period depends on the company’s annual turnover:
- Quarterly tax period for companies with a yearly turnover below AED 150 million.
- Monthly tax period for companies with a yearly turnover of AED 150 million or more.
Calculating VAT can be a laborious and intricate task, involving the compilation of all taxable supplies and exports over a specific period. For businesses lacking expertise in this area, completing VAT return filings in the UAE can prove to be quite challenging. Moreover, the required submission format according to FTA guidelines adds to the complexity. As a result, all eligible businesses are advised to seek the assistance of experienced firms offering VAT return filing services in the UAE. At ATC Group, our proficient VAT consultants are equipped to handle your VAT return filing services in the UAE.
Frequent Errors in UAE VAT Return Filing in the UAE.
- Overlooking the Reverse Charge Mechanism
- Incorrect Utilization of Adjustment Columns
- Failure to Maintain Updated Records
- Mistakes in VAT Computations
- Limited VAT Compliance due to Ineffective Strategies and Preparation
- Neglecting to Report Zero-rated and Exempted Sales
- Wrongly Claiming Input Credit on Blocked and Disallowed Expenses
- Erroneous Reporting of Standard-rated Sales as Zero-rated and Vice Versa
