Everyone has observed a hike in prices of various goods and services since the VAT in UAE has applied.
To build a positive image and reputation in the market, It is required to have robust compliance within the company itself.
The Federal Tax Authority (FTA) has claimed that all businesses subject to Value Added Tax (VAT) must display prices of goods and services inclusive of tax to avoid administrative penalties.
UAE VAT return should be filled by businesses online using the Federal Tax Authority (FTA) portal. The FTA has announced that all products should have prices with VAT amount, preventing customers from paying more sum of an amount at the time of purchase. The prices that don’t include the amount of tax charged is considered a violation of the rule.
What is vat return filing
Vat return filing is used for the tenor of reporting the VAT, collected and paid by the entity to the tax authority in a specified period at regular intervals. The form which is used to file a VAT return is known as Form VAT201.
Filing VAT returns timely in an appropriate manner will prevent you from fines and penalties imposed by the Federal Tax Authority UAE.
You need to be aware of your VAT return filing periods as per FTA’s requirements and guidelines.
What is the penalty on a delay of the VAT Return?
Delay in VAT return attracts a penalty of AED 1,000 for the first time. The penalty would gradually increase for subsequent non-compliance of filing of VAT Return.
Things to be considered for Filing VAT Return in UAE
All the mandatory fields should be completed while filing the VAT Return. All the taxable amount should be in the United Arab Emirates Dirham (AED). All the mandatory fields should be completed while filing the VAT Return. All the taxable amount should be in the United Arab Emirates Dirham (AED). Every registrant should provide details of taxable supplies in Emirates.
What are the Benefits of Filing VAT Return
- VAT filing guards your business and gives a legal assurance and proof of your business existence.
- VAT filing has an upper edge in the arena of tax payments thereby, avoiding financial loss, securing your business furthermore.
What are the 7 critical things you need to know about VAT return filing service UAE
- Online portal for Tax filing
VAT returns will be done entirely online by logging into the online portal of FTA. For convenience, e-portals are in existence, and manual returns will not be accepted. If there is any delay or failure on the part of the businesses to file VAT returns, penalties will apply as per the law. For filing the VAT return, online registration on the website portal is required.
- VAT Return Period
The VAT Return must be received by the FTA (The Federal Tax Authority) before or on the 28th day following the end of the Tax Period or by the date directed by the FTA. The FTA must receive the due payment by the same deadline. In case, if the due date of submitting the VAT Return and the corresponding payment falls on a weekend or a national holiday, then the deadline to file the VAT Return will be extended to the first business working day.
- The VAT on sales and all other outputs
A Taxable Person is required to submit a VAT Return filing, for each Tax Period, which consists of details of the supplies made or received by the Taxable Person.
UAE and associate GCC nations in the form of Value Added Tax (VAT) on all goods and services at a standard rate of 5% are effective from 1st January 2018.
- The VAT on Expense and All Other Inputs
Every Detail regarding the purchases made needs to be furnished along with 5% tax.
- Net VAT Due
The tax that is due to the tax authority during the tax period is known as the VAT payable, whereas the VAT recoverable section is the total value of input tax that is recoverable for the tax period. The deduction between these two sections is net VAT payable.
- Additional Reporting Requirements
Some businesses apply for Profit Margin Scheme during the VAT period. Additional reporting requirements are in existence by some businesses.
- Authorized Signatures
The authorized signatures are mandatory on the documents before submitting them for VAT filing. The taxpayer should cross-check the documents properly before submission, and assure it contains authorized signatures or not.
The UAE VAT return filing requires the details, that need to be consolidated according to the format prescribed by the Federal Tax Authority (FTA). It will be a difficult task for a business to compile transactions for filing VAT Returns manually. Therefore, companies must have the right tax accounting software, which will help in VAT transactions. With the help of the right Tax accounting software, businesses can easily generate the accurate VAT Return, avoiding hefty penalties.