VAT Return Filing in Dubai, UAE

As a UAE business that is VAT-registered, you are legally mandated to handle your business’ VAT return filing in Dubai on a regular basis with the FTA (Federal Tax Authority). This procedure encapsulates precisely reporting both your input and output VAT to guarantee 100% compliance and avoid paying major penalties. Xpert Tax specializes in meticulous and trusted VAT return filing in Dubai, UAE, aiding you in seamlessly navigating the intricacies of UAE’s tax regulations.

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What is VAT Return Filing in the UAE?

Understanding What is VAT Return Filing in the UAE

A VAT return refers to a necessary document that every VAT-registered business entity must submit to the Federal Tax Authority. It states the entire amount of VAT (output) collected on sales as well as the gross amount of VAT (input) paid on purchases during a particular tax period.

The net outcome of the aforementioned calculation determines whether your business entity in the UAE owes the FTA a VAT payment or if they are eligible for a refund. This filing is important for the maintenance of legal compliance as well as providing authorities with a crystal-clear image of your business entity’s taxable transactions.

The Importance of UAE VAT Return Filing

Why is VAT Return Filing Important for Your UAE Business?

Legal Compliance: As per Federal Law of the UAE, on-time submission of Form VAT 201 is non-negotiable.

Optimization of Cash Flow: Accurate filing is mandatory to reclaim input VAT, i.e., the tax paid on expenditures, reducing your final tax liability.

Business Credibility: Continued compliance builds up trust with the official government authorities as well as the stakeholders.

Xpert Tax handles the entire complete cycle of VAT Return Filing in UAE, ensuring perfect precision and adherence to the set deadlines so you can shift your focus towards your business’ core operation.

Entities Required to File UAE VAT Returns

Who Needs to File a VAT Return in the UAE?

All businesses, individuals, as well as entities registered in the UAE for VAT with the Federal Tax Authority must file VAT returns in a periodic manner. This includes:

Mandatory Registrants: Businesses whose taxable supply turnover goes beyond AED 375,000* yearly.

Voluntary Registrants: Businesses whose turnover goes past AED 187,500* who have voluntarily registered for VAT.

Business Entities With No Transactions: Even if an officially-registered business entity has not conducted a single transaction during a specific tax period, it must still put in a “Nil” VAT return.

UAE VAT Return Filing Schedule & Deadlines

The Federal Tax Authority (FTA) assigns a specific tax period upon registration. This must be adhered to in a strict manner.

Standard Period: In most cases, it is done in a quarterly manner, i.e., every three months.

Deadline for Filing: Both submissions as well as payments are due within 28 days from the relevant tax period’s end.

Note: Specific large businesses might be needed to file VAT returns on a monthly basis to the FTA.

What is the Process of UAE VAT Return Filing?

The Complete Process of VAT Return Filing in Dubai, UAE

Filing a VAT Return in Dubai, UAE, is done online, using the FTA’s online portal. Here is an overview of the VAT Return Filing process:

Step 1: Log In to the FTA’s e-Services Portal

Navigate to the official online portal of the FTA and access your business’ account with the help of your registered credentials.

Step 2: Navigate to the VAT 201 (Vat Return) Form

Search for the VAT 201 form and open it for the relevant tax period.

Step 3: Fill Up All the Required Sections

The form features multiple sections where you need to enter important information related to sales, purchases, as well as VAT amounts.

Step 4: Review & Submit the Completed Form

Go through the details of the filled up return form carefully. Once the evaluation is complete, submit the VAT return.

Step 5: Pay the Due Amount of Tax

If your VAT return shows a net VAT payable, you need to settle the entire amount with the Federal Tax Authority through authenticated payment channels such as e-Dirham, GIBAN, or online bank transfers.

Penalties for Not Complying With UAE VAT Regulations

Penalties & Fines for Non-Compliance with UAE VAT Laws

Failing to comply with the VAT regulations of the UAE can lead to you paying major fiscal penalties. It is important to know all the penalties to truly understand the financial risk involved.

Failing to Register: AED 20,000 is charged if someone fails to register for VAT within the set timeframe.

Late Filing: AED 1,000* is charged for the first offense, and AED 2,000* is levied for repeated offenses within a period of 24 months.

Late Payment: Fines for late payment of due tax is calculated as a percentage of the total unpaid amount. Moreover, the increase over time. 2% immediate penalty is charged, in addition to escalating monthly fines (max. 300%).

Incorrect Submission: Depending on the inaccuracies, the fines for incorrect VAT return submission are calculated. They can be substantial.

Failure to Keep Official Records: AED 10,000* for the first offense and AED 50,000* for repeated offenses.

Common Mistakes to Avoid When Filing VAT Return in Dubai, UAE

Here are some common mistakes you should avoid when filing VAT Returns in Dubai, UAE:

Misclassification of distinct supply types, i.e., mixing up Exempt and Zero-Rated supplies.
Inaccurate application of RCM (Reverse Charge Mechanism).
Inadequate maintenance of tax-compliant records (minimum retention of 5 years is a must).
Failure to submit a Voluntary Disclosure for known mistakes.

How Xpert Tax Streamlines Your VAT Return Filing Process

Xpert Tax offers a complete suite of services when it comes to VAT Return Filing in Dubai, UAE. Every service is specifically designed to ensure that your business venture remains 100% compliant with the UAE law. We offer:

Compilation of Data: Our team collects and evaluates all your fiscal information for the concerned tax period, including sales invoices, expenditure reports, and purchase receipts.

Return Preparation: We ready your VAT return, i.e., form VAT 201, as per FTA regulations, making sure every figure is on-point and properly classified.

On-Time Submission: Xpert Tax guarantees your VAT Return’s submission through the FTA’s portal well before the set deadline, offering you complete mental peace.

Advisory Services: We offer ongoing advice when it comes to VAT compilations, aiding you in the optimization of your tax position in addition to helping you avoid any kind of potential administrative fine.

Liaison with the FTA: In the case of any audit or query from the FTA’s side, we act as your business’ dedicated representative, handling all communication & correspondence.

Ensure Complete Peace of Mind by Partnering with Xpert Tax

Stop risking heavy penalties for complicated compliance needs. The responsibility of VAT Return Filing in Dubai, UAE, is significant, demanding absolute attention to evolving UAE regulations. By partnering up with Xpert Tax for VAT Return Filing in Dubai, you gain access to experienced consultants who handle every step of the process, right from RCM calculations to audit-proof documentation. Safeguard your compliance and optimize your business’ tax position by availing our services. Get in touch with us today for a complimentary consultation!

Common Queries about UAE VAT Return Filing

Frequently Asked Questions (FAQs)

What is the number of the VAT Return form in the UAE?

The official form for filing a VAT return in Dubai, UAE, is VAT 201. It is submitted online using the Federal Tax Authority’s e-Services portal.

What happens if the VAT Return filing is late?

A fine of AED 1,000* is imposed by FTA for the first time late filing is done. It increased to AED 2,000* for the second time if it happens within a period of 24 months. Separately, paying due taxes late incurs steep, escalating interest, along with percentage fines.

What happens if a business does not have any sales or purchases in a tax period?

Even if a business has no activity, it must file for a “Nil” VAT return to the Federal Tax Authority (FTA) or carry forth the credit to the upcoming tax period.