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How to file a VAT return in Dubai, UAE

How to file a VAT return in Dubai, UAE - Makebiz

In the United Arab Emirates, filing VAT returns plays a key role in the tax system. They summarize the value of materials and purchases made during a certain period and disclose the amount of liabilities.

Registration with the tax office obliges taxpayers to file a return once for each period defined by the FTA, which is most often monthly or quarterly. Businesses that are VAT payers need to collect VAT on the goods or services that are taxed and provided to them. Any VAT paid on goods or services related to the business can be refunded.

Returns are filed with the Federal Tax Administration (FTA). This process helps businesses to comply with UAE legislation and avoid the potential financial cost of penalties as well as reputational damage.

A VAT return is a document that summarizes all sales and purchases made within a certain timeframe. It is generated from invoices and filed through the FTA website using the “VAT 201” form. The document includes the following sections:

  • Details of the taxable person.
  • Tax refund period.
  • VAT on sales and all other goods. Details of goods taxable at UAE standard rate and zero rate should be provided here.
  • VAT on expenditure and all other inputs. Here you need to provide details of purchases or expenses on which you have paid VAT (at the standard rate of 5%). You can also list here the goods subject to chargeback that fall within the recoverable input tax.
  • Net tax payable, which shows the total amount of input tax that is payable. It is calculated from the information declared under Sales and All Other Results.
  • Additional reporting requirements.
  • Declaration and authorized signature.

The deadline for filing a UAE report is the 28th day of the month that follows the tax period. If that day is a weekend or national holiday, the deadline will be extended to the next business day. The standard period for a taxable person in the Emirates is three calendar months. However, the FTA may assign different deadlines for certain groups of individuals. Fines will be imposed for late submission of the document.

There are a few key steps to follow when preparing for Emirates reporting:

  • Compiling all relevant documentation: records of all transactions made during the tax period.
  • Confirming all transactions: make sure all figures are correct and all payments have been correctly recorded. The form requires comprehensive information on goods subject to tax, goods subject to 0% and 5% VAT and purchases or expenditure on which it has been paid.
  • Calculation of net tax payable for the period: if output tax exceeds input tax, the difference must be paid to the FTA. If input tax exceeds output tax, the excess can be offset against future payments due under the FTA.

If you notice an error or omission, you can use FTA’s Voluntary Disclosure Form 211 to correct it. It allows you to report the error to an authorized agency and voluntarily correct it before it is discovered during a tax audit or assessment.

Access to FTA’s electronic services is available through the UAE Pass system. After submitting your returns, you will receive a confirmation message from the Federal Tax Administration. You can then proceed to repay the tax if it arises on the form.  

Makebiz experts can help you understand the intricacies of filing returns and record keeping. Sign up for a free consultation and find out how to file tax returns in Dubai.

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