Value-added Tax abbreviated as VAT became a regulation for businesses in the UAE in January 2018. Every business operating in the country which its reports its annual revenues to be higher than AED 375,000 needs to make a transition to become VAT compliant. This transition requires some changes in business operations and has to pay VAT returns in due time.
What is a VAT return?
VAT return, commonly referred to as Tax return in the UAE, is a statement that VAT registered businesses need to pay to the federal authority. UAE VAT executive regulations define the details of the data that every registered and VAT compliant business needs to submit in the form of the said statement.
This article will briefly answer common queries regarding VAT return in the UAE.
VAT return filing and submission: FAQs
VAT return filing and submission process is often a source of confusion for people who are just getting started with it. If you are one of those people, you must be having a difficult time understanding and, consequently, following the regulations. Filing VAT and making the payment is a comprehensive process. A thorough understanding is thus, important to develop. There are risks and penalties involved in the compliance process.
Some of the questions have been answered below for your convenience:
1. Do all registered businesses file returns?
Businesses, once falling under the threshold for VAT obligation, need to register mandatorily. Once they have registered for it, and get started with the compliance process, VAT return filing is an inevitable component to undertake.
2. What is the VAT return filing period?
Under the UAE regulations, VAT registered businesses need to file returns on a quarterly basis. But this is the standard time period. The FTA possesses the authority to ask different businesses to file returns after a month. Such steps are often taken so as to reduce the chances of tax evasion attempts by small and big businesses alike.
Sometimes, however, the return filing period is extended beyond a quarter, because of one of the two reasons. These can be aimed to reduce the administrative burden on the FAT or to give breathing room to the businesses under the compliance burden.
3. Is it possible to file a physical VAT return?
VAT process entirely takes place online on the official FTA website since the point of initiation. Even VAT returns have to be paid online by all classes of businesses regardless of the return filing period.
4. What is the due date for VAT return submission?
As discussed in a previous question, the standard VAT return filing period is on a quarterly basis. So in the normal case, the deadline for VAT return is 28th of the month after the tax period ends. Whereas for conditions where certain classes of business are asked by the FTA to submit return monthly, the last date for it will be the 28ty day of the subsequent month
While the deadlines are easy to understand, all companies need to not only comply but save themselves from the risk of penalties. To avoid such a risk, you can seek professional services of Best VAT consultancy in Dubai and get through a VAT return filing process with ease. Professionals will guide you through the due process and help your company in all aspects of compliance.
5. What is the VAT Return format?
As discussed, the VAT return is a statement submitted online. The submission is carried out through an online form, and the details are prescribed by the authority itself. You can access the VAT Return format, and you will be able to see all the supplies that you need to mention in it, although these same supplies are furnished by the registered business itself in the form.
6. What can you add in the VAT return form?
VAT is applicable to almost all supplies and goods, with some exceptions. So, broadly speaking, you need to add the data of all your supplies, including their purchase and sale, input, and output tax. You also need to add the details pertaining to the imported goods. There is a separate field provided for this very purpose in the VAT return form.
The return form shows the taxable supplies for which the VAT stands at the standard 5% rate, as well as the non-taxable zero-rated supplies. You have to declare both of these separately.
Is VAT return process difficult to understand?
First things first: understand if your business is VAT registered and compliant or not. If it is obliged to, but not registered yet, go for registration now. If you want to go through the VAT process safely and without any risks, seek professional help. VAT professionals will help you sail through the process with success.
VAT compliance has many benefits, as well. So you might register for it as soon as possible!
