Your Guide to Filing a VAT Return in the UAE

Nov 2018

With value added tax (VAT) in the UAE from 2018 come certain new systems and regulations, catching up on which could prove beneficial to business owners.

VAT, as a general consumption tax, will apply to transactions in goods and services in the UAE. A limited number of exemptions may be provided. Here’s going through all you need to know about filing a VAT return in the country.

What is VAT return filing?

VAT return is a form to be filed with the Federal Tax Authority (FTA), normally on a quarterly basis, to indicate the amount of VAT to be paid to the latter. All businesses registered for VAT are required to file VAT returns.

Why is VAT return filing required?

VAT return filing is done so that VAT-registered businesses may:

  • Charge VAT on taxable goods/services from their customers
  • Maintain records to stay transparent in the eyes of the regulatory authority
  • Reclaim any VAT in case they have paid more of it than they have charged

Which businesses does VAT apply to in the UAE?

For businesses with an annual turnover of over AED 375,000, it is mandatory to file for a tax return. For businesses with an annual turnover between AED 187,500 and 375,000, it is voluntary to opt for VAT registration and filing.

When is a business supposed to file VAT return?

VAT-registered businesses must file VAT returns with the FTA periodically and usually within 28 days of the end of the ‘tax period’ [defined for each type of business]. A ‘tax period’ is a pre-defined duration of time for which the payable tax is determined and paid. The standard VAT period in the UAE is:

  • Quarterly for businesses with an annual revenue below AED 150 million
  • Monthly for businesses with an annual revenue equal to or more than AED 150 million

What would happen if a business fails to file its VAT return?

For a VAT-registered business, failure to file a timely tax return would make the violator 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.

Late filing of VAT return attracts a penalty of AED 1,000 for the first time a delay happens. The penalty increases for subsequent non-compliance of VAT return filing.

How to file VAT return?

  • Login to the portal of the FTA
  • Select ‘VAT 201 – New VAT Return’ option under the e-services section of the page to start the VAT return filing process
  • Enter the details of the standard-rated supplies in the form
  • Enter the details of the zero-rated and VAT-exempt supplies
  • Basis the information provided by you, the due (or recoverable) tax for the period is calculated
  • Submit the form, and you will receive a confirmation email for submission
  • If any VAT is due, it can be paid at the ‘My Payments’ section of the portal

A Few Points to Keep in Mind While Filing Your VAT Return

  • The amounts entered must be in Dirhams, and rounded off to the nearest fil
  • Enter ‘0’ if no VAT is to be declared
  • Make certain to fill in all the mandatory fields in the form

VAT filing not only protects your business but gives a legal assurance and proof of your business existence. It is pivotal in the arena of tax payments, obviating any undue financial loss. Are you looking to file your VAT return for this quarter? Well, we have a solution for you.

JAXA | Your VAT Return Filing Guide

JAXA has been dealing in providing accounting and taxation services to start-ups and established businesses at a global level. We have a large number of satisfied clients at a global reach ranging from small and medium to multi-national businesses. We have been providing one of the best VAT consultancy services in the UAE.  If you are looking for a VAT consultant, you can count on us. To know more about VAT filing in the UAE, do contact us – we’d be glad to assist you.