VAT Filing in UAE
Filing of VAT return is mandatory for all those who are registered for VAT, irrespective of the type of sales, purchases, tax, VAT registration, etc. AHG helps individuals and business to file VAT return in UAE in addition to providing various other VAT services. Rendering the best guidance and assistance for your VAT Return in accordance with the UAE VAT law, AHG offers VAT Return filing with proper maintenance of accounting documents related to each tax filing.
What is VAT Filing?
The filing of a VAT return refers to submitting a form providing information on VAT-related sales and costs that occurred within a given tax period. The filing of VAT returns in the UAE assists businesses in determining the amount of VAT that must be paid and initiating VAT reclaim or refund procedures.
Businesses must file their VAT returns through the Federal Tax Authority (FTA) site. Because offline methods to file VAT returns using XML, EXCEL, or any other software are currently unavailable, the FTA site is designed to accept returns solely through online mode.
This means the taxpayer must manually enter the figures for Sales, Purchases, Output VAT, Input and Input VAT, and other items in the appropriate fields of the VAT return form available on the FTA site.
VAT Filing in UAE
VAT Return filing is the official tax report a registered business has to submit to the Federal Tax Authority before the due date. It is to be done by the taxable Person at regular intervals in compliance with his/her tax period. The VAT Return Filing Form records the details of the output tax due and the input tax to be recovered and some other information essential in the format. VAT return filing is not just proof your business existence but can safeguard your business providing legal assurance and advantages in the stage of tax payments, avoiding financial loss. AHG offers VAT return filing services in UAE delivering outstanding VAT services to help you grow your business.
The VAT return form ‘VAT 201’ is available in the FTA portal. You can log in to this portal using your password and registered username.
Tax Period for VAT Return Filing as per FTA
- VAT Return Filing in UAE is to be done by no later than the 28th day of the month following the Tax period or by another date if demanded by the FTA.
- If any payment is due, it must be received by the FTA by the same deadline.
- If any payment is due, it should also be paid by the same deadline.
- If the due date comes on a weekend or a national holiday, the deadline is extended to the next business day.
- The standard Tax period for a Taxable Person is a period of three calendar months.
- The FTA may assign different tax Periods for a certain group of Taxable Persons.
- In certain cases, the tax period may be fixed on a monthly basis.
- The request for an extension of the tax filing period may be accepted by the FTA at its discretion.
You must file for tax return electronically through the website of Federal Tax Authority. Before filing the VAT return form, make sure you have met all the requirements.
At the end of each tax period, VAT registered businesses or the ‘taxable persons’ must submit a ‘VAT return’ to Federal Tax Authority (FTA).
A VAT return summarizes the value of the supplies and purchases a taxable person has made during the tax period, and shows the taxable person’s VAT liability.
Liability of VAT
The liability of VAT is the difference between the output tax payable (VAT charged on supplies of goods and services) for a given tax period and the input tax (VAT incurred on purchases) recoverable for the same tax period.
Where the output tax exceeds the input tax amount, the difference must be paid to FTA. Where the input tax exceeds the output tax, a taxable person will have the excess input tax recovered; he will be entitled to set this off against subsequent payment due to FTA.
How to file VAT return?
You must file for tax return electronically through the FTA portal: eservices.tax.gov.ae. Before filing the VAT return form on the portal, make sure you have met all tax returns requirements.
When are businesses required to file VAT return?
Taxable businesses must file VAT returns with FTA on a regular basis and usually within 28 days of the end of the ‘tax period’ as defined for each type of business.
A ‘tax period’ is a specific period of time for which the payable tax shall be calculated and paid. The standard tax period is:
- quarterly for businesses with an annual turnover below AED150 million
- monthly for businesses with an annual turnover of AED150 million or more.
Which sectors are subject to VAT?
VAT is levied on the supply of all goods and services, including food, commercial buildings and hotel services, if no explicit provision is made to impose a zero rate or an exemption.
Steps of VAT Filling in UAE?
If you are interested in knowing more about VAT, read on 8 interesting facts about VAT UAE and the steps are mentioned below for the VAT filing in the UAE:
1. Register with the Internal Revenue Service
A VAT-registered business entity in the UAE should have an account with the Federal Tax Authority (FTA). The account is necessary to begin the filing procedure. To guarantee that all information submitted to the tax office is valid, it is essential to employ a registered tax agent in the UAE to create an FTA account.
2. Give the FTA Information to the Taxable Person
A VAT-registered business entity is referred to as a taxable person. After starting the VAT return filing procedure by creating an FTA account, the following step is to provide the regulatory body with information about the firm’s name, address, and tax registration number or TRN. If a licensed tax consultant in the UAE is recruited to assist with the procedure, the expert may fill in the necessary data on the company’s behalf.
3. Provide a Detailed Accounting of all VAT Sales, Expenses, and other Inputs
The FTA must receive all relevant information on a business’s VAT sales and costs for a single financial year. In addition, details on expenses incurred at a rate of 5%, which is the current VAT rate, must also be given.
4. Provide net VAT Calculations as a Result of the FTA.
As soon as the facts on VAT sales, costs, and associated inputs have been received, the firm must also give estimations of net VAT owed. The tax authorities must be paid the VAT due amount that is higher than the recoverable. If the recoverable amount exceeds the FTA, the difference can be reimbursed through the VAT reclaim or refund process. The estimate submitted to the FTA represents the business’s tax liability for each tax period.
5. Make a Formal Declaration
Finally, a declaration verifying the correctness of all information supplied to the FTA must be filed.
For submitting VAT returns to the UAE’s Federal Tax Authority, a corporate entity must be cautious. Providing false information can result in tens of thousands of dirham in penalties. Hiring a VAT professional or certified tax agent in the UAE is one way to avoid accumulating hefty fines and penalties.
Types of VAT in the UAE
The UAE now has the following five types of taxes in place:
- Foreign banks are subject to a 20% corporate income tax.
- In addition, 5% of the rental value is subject to a local municipality property tax.
- Hotel services are subject to a 10% local hotel tax.
- In addition, a 5% general tax, a 50% alcohol tax, and a 100% tobacco tax were all collected locally.
- Finally, fees for specific government services are collected (applied by the federal and Dubai governments).
A professional can ensure that the firm has supplied verifiable information, ensuring that it is not punished. The specialist can also assist you in carrying out the procedure with little or no involvement from you. Furthermore, a tax controlled agent in Dubai is knowledgeable about VAT legislation and the implementation of processes that the UAE’s tax authority may seek.
Since AHG ’s an Approved Tax Agency in the FTA of UAE and one of the leading Tax Agencies who is specialized in the Excise Tax, AHG’s Services range from Tax Registration, Tax Filing, Tax consultancy, Warehouse Keepers and Designated Zones Registration, Stock and Duty Calculation, Advice on Stockpilers, Tax Agent, Digital Tax Stamps Filing Disputes, Representation in front of the FTA of UAE