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Filing VAT Return in UAE

By September 23, 2019 No Comments

Business which are registered in Value Added Tax (VAT) or “Taxable persons” must have to file VAT return to the Federal Tax Authority (FTA) at the end of each tax period or tax year. A VAT return show the information of purchases(consumption) or supplies made during the tax period (tax year) and also shows the liability or tax payable on the person.

LIABILITY OF VAT:

We calculate the tax liability by the difference between the output tax payable and the input tax. In other words, the difference between the tax imposed or charged on taxable supplies of goods and services and the tax incurred on purchases recoverable for the same tax period.

If the output tax exceeds the input tax which means the exceed amount will be payable to the FTA by the taxable person.

If the input tax exceeds the output tax which means the exceed amount will be recovered by the taxable person from the FTA in subsequent payment due to FTA.

WHEN ARE BUSINESSES REQUIRED TO FILE TAX RETURN:

All the taxable businesses have to file tax return on a regular basis mean in every tax period and usually file within 28 days of the end of every tax period or tax year. The standard tax period is:

  • Businesses whose annual turnover does not exceed or below AED 150 million have file a quarterly tax return.
  • Businesses whose annual turnover exceeds or above AED 150 million have file a monthly tax return.

FAILURE TO FILE TAX RETURN:

If any business or taxable person fails to file a tax return with in the specified time period than they are liable to pay fines as per the provisions.

HOW TO FILE VAT RETURN:

There are the following steps to file a VAT return:

  1. First to login in the portal which is made by Federal Tax Authority (FTA) for filing of return tax.gov.ae with the registered name and password.
  2. Click on VAT 201 New VAT Return option under the e-services section to start the VAT Return form.
  3. Filing the contents of standard rated supplies which is given in the form about in subsection 2.
  4. In fourth step tax you have to check of tax refund treatment to the tourists under the scheme of tax refunds.
  5. In this step some supplies have reverse charge provisions for which we will include the services we imported during the period.
  6. In this step we only stated the value of the zero-rated supplies because the rate VAT on these supplies are 0% which so calculated as nil.
  7. EXEMPT SUPPLIES: In this step we only include the value of supplies because no VAT imposed or incurred on exempt supplies.
  8. In this step we include those goods which are imported through UAE customs. We conclude the value of imports by sum of customs declared value (CIF) and the customs duty amount.

If the non-registered person import goods it is their responsibility to pay tax on imports.

The input credit can be taken against the amount disclosed under this step.

  1. If there is any mistake or correction or omission in any figure in step 8 you use this step to correct all the figures you’ve missed to insert or omit.
  2. In this step we include the amount all expenses incurred to the standard rate of VAT also purchase from local markets as well. The total value of purchase and expenses made or which you want to avail input tax and the amount should be put in the AED column. The tax we paid to suppliers should not be included in this, only net of tax.
  3. Any output tax payable under the reverse charged provision can be recovered in this step. Some expenses not be included in this step whose VAT is incurred and falling under Reverse Charge Mechanism for which Input Tax is not recovered.
  4. CALCULATION FOR DUE TAX OR RECOVERABLE TAX FOR THE PERIOD: when the output tax exceeds the input tax then the amount payable on the taxable person or business to the FTA or if the input tax exceeds output tax then the exceed value will be recovered from FTA in subsequent tax period.
  5. In this step you have two options “yes” or “no” for VAT recoverable on VAT return for recovery of excess tax.

If you select ‘YES’, kindly fill and complete the VAT Refund Form VAT 311 once VAT Return Form is submitted.

If you select ‘No’ your excess tax amount to be recovered will be taken forward for Subsequent Tax Period which                 can be used to pay for a subsequent tax period or penalties.

  1. The last step in which you are submitting the form but before submitting you have to review the information or details entered is correct or not. After review you can submit the form. When you submit the form, you receive an email for confirmation.

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