What is VAT Return Filing?
VAT return filings are the submission of the tax documents by a business entity to the Federal Tax Authority (FTA). A registered entity should file for VAT depending upon the tax period. The filing shows if there is any tax due or any excess taxes charged towards the business entity.
How to File VAT Returns?
To file VAT Returns, you need to follow these steps:
1. Login to the Federal Tax Authorities Portal
To access the VAT Form 201, log in to the FTA Portal using the registered username and password. Next, click on ‘VAT 201’ on the navigation menu, and then select ‘VAT 201-New VAT Return’ to initiate the filing process.
2. Fill the Taxable Person Details
After initiating the filing process, you need to fill the taxable person details, including the Tax Registration Number (TRN).
3. Choose the VAT Return Period
Details of the period of the VAT Returns needs to be filled. This period declares the duration for which you are filing the VAT returns.
4. Fill the contents of standard-rated supplies from 1a to 1g.
All Standard Rated Supplies should be reported for VAT Return Filing. For businesses not established in the UAE, supplies have to be reported where the supply is received.
5. Supplies subject to the reverse charge provisions.
Include the services which you imported during the period.
6. Zero-rated supplies
Here include all the supplies made under zero-rated VAT (“zero-rated supplies”). Since the VAT on supply is zero, only the net value of the supply should be stated here.
7. Exempt supplies
Include only the exempted supplies made during the period. Since there is no VAT on such supplies, only the net value is to be stated.
8. Goods imported into the UAE
Goods that were imported through UAE customs have to be disclosed under this step. 5% tax is payable on those goods. This amount will be automatically shown in your VAT Return form.
9. Adjustments to goods imported into the UAE
In case there are any corrections or omissions on the figure disclosed under No. 8 rectification can be done. The figures can vary, but when questioned by the FTA should be answerable.
For agents who import goods into the UAE, it is the agents’ responsibility to pay tax for the import of goods. In case of corrections, or you might have missed inserting the figures you should use this to amend the figures accordingly.
10. Standard rated expenses
Expenses that pertain to the standard rate of VAT to recover the Input Tax. This includes the purchases from the local market also. This column should include only the VAT you will be able to recover.
11. Supplies subject to the reverse charge provisions
Any output tax to be paid under the reverse charge mechanism that has been stated in No. 5, 8 & 9 above, can be recovered under this step. On expenses where VAT is incurred and falling under the Reverse Charge Mechanism for which Input Tax is not recoverable, those expenses should not be stated in here. If you have paid VAT during import due to any reason, such VAT amount also can be recovered under this
12. Calculation of due tax or recoverable tax
The amount payable is the difference between output VAT and input VAT.
In cases where the Output is more than the Input, there is a provision to request for a refund for the net amount of recoverable tax.
13. Step for a refund of excess recoverable tax
The option for total recoverable tax will be available on the VAT return for recovery of excess tax. There will be two options: ‘YES’ & ‘NO’.
If you select ‘YES’, fill the VAT Refund Form VAT 311 once VAT Return Form is submitted.
If you select ‘No’, the excess tax amount will be taken forward for the subsequent Tax Period.
14. Declaration and Authorized Signatory
Finally, all you need to do is check the declaration section and proceed on filing it. Here, you have an option to save the complete details as a draft and submit it later.
The VAT Returns needs to be filed this way and taking the utmost care of all the necessary details while filing your VAT return. Failure in doing this is problematic and might lead to trouble. The best option is to have a consultation with a VAT consultant and then proceed ahead. Expert professionals are well-versed with the VAT laws and implementation proceedings and can carry out the process in a hassle-free way and in a much easier way than you can ever do it in-house.
JAXA is a leader in accounting and taxation services to various and businesses at a global level. We understand the special requirements of each of our clients and offer customised solutions and services to all of them. If you are looking for consultancy services on VAT in the UAE, we can help you. To know more about VAT in the UAE and other services related to VAT that we provide, do contact us – we’d be glad to assist you.
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