The VAT is one of the recently initiated steps taken by the GCC countries. The idea of launching this step was to bring out a new source of revenue. Being a part of GCC, the United Arab Emirates (UAE) needs to implement the same. Now, at this point, it becomes essential for business investors, owners, and entrepreneurs to have a clear idea regarding the VAT registration process and VAT return filing procedure. Being knowledgeable regarding this will not only help you to file the VAT returns but also will provide you with a holistic view regarding each point of the operational activities and how it is calculated. If you hold business in the UAE, then this guide will give you a clear idea as to what VAT returns is all about and how you can proceed ahead to file it.
What is a VAT Return Filing?
VAT Return Filing refers to the form that needs to be filled regarding the VAT sales and expenses made during a particular period. VAT Return Filing helps a business entity to understand how much VAT is required to be paid or to initiate a refund request.
How to proceed VAT Return Filing?
To proceed with the VAT Return filing, you need to go through the following steps:
1.Login to the Federal Tax Authorities Portal
To access the VAT Form 201, initially, you have to log in to the FTA Portal using the registered username and password. Next, you need to go through the navigation menu and click on ‘VAT 201’, and then select ‘VAT 201-New VAT Return’ to initiate the filing process.
2. Fill the Taxable Person details
Once you have initiated the filing process, in the next step, you need to fill the taxable person details including the Tax Registration Number (TRN), along with the name and address. If a tax consultant is assisting the processed, then they need to fill the necessary details on your behalf. Additionally, a Tax Agent Approval Number (TAAN)needs to be provided along with the tax agency name and Tax Agency Number.
3. Choose the VAT Return Period
Details regarding the VAT Return period needs to be filled. This period states the duration for which you are filing the VAT returns, the Tax year-end. This turns out to be essential for business entities so that they can recover all the necessary VAT related proceedings performed in that particular year.
4.Details of VAT on Sales and Expenses and Other Inputs
The necessary information regarding the sales and expenses made in the financial year need to be updated. Details like zero-rated supplies, exempt supplies, etc. need to be mentioned. Similarly, the details regarding VAT Expenses made at a rate of 5% needs to be said.
5.Calculate the Net VAT Due
Once you provide the details regarding both sales and expenses, the Net VAT due will be calculated. Now, if the VAT due amount is higher than that of the recoverable amount, then the difference represents the amount that you need to pay. If it stands as vice-versa, then you are eligible to claim for VAT Refund. This calculation represents the payable tax for a particular period.
6.Declaration and Authorized Signatory
In the last step, all you need to do is tick the declaration section and proceed towards filing it. At this point, you have an option to save the entire details as a draft and submit it later.
In this way, the VAT Returns needs to be filed. Now, it becomes essential to take utmost care of the necessary details while filing a VAT return. Failure to do so might put you in trouble. The best option that you can ever opt to do is process is to have a consultation with a VAT consultant, and then proceed ahead. The core reason behind this is expert professionals will help you to carry out the process in a much easier way than you can ever do it in-house. They are well-versed with the VAT laws and implementation proceedings and can carry out the process in a hassle-free way.
Maintaining the business expenses form the very start will help you to complete the filing process on-time. Here, at JAXA, we are dedicated to providing the same to our clients. Our VAT experts are well versed with the UAE VAT laws and will help you to file your VAT returns quickly. If you have any doubt or want to know how to initiate the process, do contact us today-we’d be happy to assist.