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Filing VAT in UAE: What Are the Top 5 Mistakes and How Can You Avoid Them?

May 21, 2025 Comments Off on Filing VAT in UAE: What Are the Top 5 Mistakes and How Can You Avoid Them?

Understanding common VAT compliance mistakes can protect UAE businesses from hefty penalties. Do not let VAT penalties in the UAE  cost your business. Let’s discover the top VAT compliance pitfalls in the UAE and learn from the expertise of Jaxa Chartered Accountants to stay compliant with the UAE Federal Tax Authority, and they can guide you to avoid penalties and ensure smooth processes.

With the introduction of VAT in the UAE, 2018 marks a significant milestone aimed at focusing on encouraging economic diversification and changing UAE financial system.  The United Arab Emirates’ Federal Tax Authority has continuously provided more information and updates to help with VAT compliance issues all around the nation. According to UAE VAT regulations, businesses in the UAE must complete UAE VAT registration, file accurate VAT returns, and make UAE VAT payments within the specified deadlines to stay complaint with UAE FTA regulations.

Working with Jaxa, a UAE FTA registered tax agent, helps to ensure the company stays compliant with UAE VAT regulation and helps to avoid penalties.

Here, we provide comprehensive guidance on the most common VAT mistakes and how to avoid them for UAE business.

Are you aware of the Risk of VAT Non-Compliance in the UAE?

VAT compliance is not just a formality- it is a legal requirement for UAE businesses. One must follow it strictly or else run the risk of facing fines, delayed refunds claims or hefty penalties in the event of an FTA tax audit. Being aware of and avoiding common VAT errors in the UAE can protect your business and stay on top of VAT filing in the UAE.

  1. Missing VAT filing Deadline in the UAE: To avoid financial penalties, submitting VAT returns on time is essential. Business may miss deadlines due to lack of adequate staffs, lack of reminders or poor planning.

Solutions

  • Leverage trusted accounting tools to monitor VAT deadlines
  • Set up notification alerts in advance for the VAT return deadlines.
  • Engage with a VAT consultant in the UAE, such as JAXA, to handle UAE VAT filing.

The VAT return deadline is 28th of the month after the tax period concludes. Late filing VAT return in the UAE  can lead to AED 1000 for the first violation and AED 2000 thereafter. Our VAT consultant at Jaxa in Dubai, UAE ensures smooth VAT return filing in the UAE and files VAT returns on time, and ensures accuracy.

 

  1. Errors in VAT calculations: Proper VAT calculation is crucial for avoiding penalties. Errors result from applying incorrect VAT rates, incorrect reporting of taxable supplies and input tax or misclassifying of goods and services among zero rate, standard rate, and exempt supplies.

Solutions:

  • Adopt VAT-compliant accounting tools like Zoho, QuickBooks etc.
  • Perform frequent audits of VAT records.
  • Offer the team continuous VAT training on VAT compliance.
  • Monitor the FTA website regularly for VAT updates.

Jaxa being an all-in-one VAT service provider helps to ensure accurate VAT record keeping and compliance in the UAE.

  1. Disorganized VAT records: VAT records, such as invoices, credit notes, must be kept accurate, and businesses must keep them for at least 5 years. This is a key requirement under UAE FTA guidelines. Incomplete or messy records can increase audit issues or during refund claims.

Solutions:

  • To organize and store VAT records, adopt digital bookkeeping tools such as Zoho
  • Adopt accounting tools to categorize records automatically.

With our VAT consultant in the UAE, Jaxa makes sure your records comply with UAE FTA regulations for smooth audits and reporting.

  1. Ignoring VAT Regulations Updates: The UAE FTA frequently updates VAT regulations in the UAE. Failure to stay compliant with these updates may lead to penalties.

Solutions

  • Periodically update VAT training sessions.
  • Subscribe to FTA updates.
  • Working with a VAT consultant in the UAE, such as Jaxa, helps to stay aligned with UAE FTA guidelines.
  1. Filing Incorrect or Incomplete UAE VAT Returns: Submitting VAT returns in the UAE with errors or missing information can lead to serious audits, penalties, and even rejections. Like Errors in the taxpayer’s ID, VAT collected, and amount payable.

Solutions

  • Verify all the details before submission
  • Adopt an error detection software for accuracy
  • Engage with a VAT consultant or specialist in the UAE, such as Jaxa, to ensure accurate and timely UAE VAT return filing.

Jaxa To Assist!

Ensuring proper VAT return filing in the UAE helps businesses keep on top of VAT laws by shielding them from financial penalties.  Jaxa, a leading VAT consultancy service provider, offers personalised services to ensure simple compliance with UAE FTA requirements. Our team of VAT consultants in the UAE ensures accurate UAE VAT return filing, timely VAT payment and submission, proper VAT record-keeping, and full UAE regulatory adherence.

Our team of auditors, chartered accountants, and expert professionals, having 18 years of expertise, assists in providing personalized assistance in corporate tax, accounting, bookkeeping, audit and assurance in the UAE

Secure Your VAT Compliance with Jaxa.

Contact Jaxa today for professional UAE VAT compliance assistance and keep your business penalty-free.

Trust Jaxa for end-to-end, worry-free tax solutions. Connect with our leading tax professionals in the GCC today!