Filing VAT returns is a vital responsibility for businesses operating in Abu Dhabi. However, the complications of the process can sometimes take a toll on business owners. Shuraa Tax Consultants and Accountants understand the importance of timely and accurate VAT return filing Abu Dhabi in order to maintain compliance with the regulations of the UAE. They offer tailored services that simplify the procedure, save the company from potential fines, and allow them to focus on growing their business.
VAT return filing in Abu Dhabi: Overview
VAT return filing Abu Dhabi is a process where businesses registered for VAT are required to regularly submit a formal document to the Federal Tax Authority (FTA) briefing all the sales and purchases made by them during a specified tax period, such as information on imports, exports, exempt supplies, and VAT paid or collected on each transaction.
The purpose of filing a VAT return is to reconcile the difference between the VAT collected and the VAT paid by the company so that they can reclaim the difference amount. However, there are specific criteria that businesses need to meet to be eligible for VAT return filing Abu Dhabi –
- Taxable turnover exceeding the VAT registration threshold (AED 375,000 per year).
- Supplies goods or services within the UAE.
- Imports goods into the UAE.
Importance of VAT return filing services in Abu Dhabi
VAT return filing Abu Dhabi is necessary for VAT-registered businesses. Here’s why –
- Compliance with VAT law: Under the UAE VAT law, those who fail to file VAT returns or file them incorrectly would be subject to penalties and legal complications.
- Calculation of VAT liability: Filing VAT returns help businesses determine their tax liability for the specific tax period.
- Claiming Input Tax Refunds: VAT returns allow businesses toclaim refunds for the VAT they paid on purchases. Timely filing ensures timely refunds.
- Compliance with the FTA: Businesses demonstrate their commitment to tax compliance through consistent and accurate VAT return filing. This fosters a positive relationship between the organizations with the FTA.
Deadlines for VAT return filing Abu Dhabi
Businesses are supposed to submit their VAT returns as per the ‘tax period’ applicable to them. The standard duration for filing the returns is as follows:
- Quarterly filing – Businesses that have an annual turnover below AED 150 million must file their VAT returns every three months.
- Monthly filing – Businesses that have an annual turnover of AED 150 million or more are required to file their returns every month.
The deadline for filing VAT returns in the UAE is consistently set as the 28th day of the month following the end of the tax period. In addition, the FTA has assigned different tax periods for certain businesses based on specific conditions. Hence, businesses are required to comply with these deadlines to avoid any legal troubles.
Process of VAT Return Filing Abu Dhabi
The taxpayers are required to submit their VAT returns electronically through the official portal of FTA. However, before submission, they must ensure that all prerequisites are fully met.
VAT 201 Return Form
VAT 201, also known as the VAT return form is an essential document that taxpayers are required to complete for VAT Return filing in the UAE. This form contains seven key sections that require specific information:
- Taxpayer Details: Information about the taxable person or entity
- VAT Return Period: The specific tax period
- Output Tax: VAT collected from sales
- Input VAT: VAT paid on business expenses and purchases
- Net VAT Due: VAT payable or reclaimable by the taxpayer
- Additional Requirements: Other necessary information requested by the FTA
- Declaration and Authorized Signatory: Formal declaration and signature of the person authorized for VAT return filing.
Step-by-step procedure
Here’s a breakdown of the VAT return filing process sketched by the FTA:-
- Prepare necessary documents: Gather all the relevant documents for the tax period, such as sales and purchase invoices, debit and credit notes, and other relevant documents.
- Visit the FTA portal: Register on the e-Services portal of the FTA using the Tax Registration Number (TRN) and secure the username and password.
- Navigate to the VAT return section: Locate the VAT Return section and select the appropriate tax period.
- Input the data for VAT return: Enter the required details, such as sales and purchase values, VAT collected, VAT paid, and other adjustments in the designated sections of the form.
- Review and Submit: Review all the input details carefully for accuracy before submitting the form electronically.
Documents required for filing VAT return:-
- Trade license – A legal document that serves as evidence of the legal existence of the company in the UAE.
- Tax Registration Certificate – Issued by the Federal Tax Authority (FTA), this certificate is proof of the company’s VAT registration.
- Tax Invoices –Tax invoices are the foundation of the VAT records of the company that include details of the supplier and recipient, the date and number of the invoice, tax amounts, and VAT rates.
- Purchase Invoices – Records of the input VAT paid on things purchased for the company.
- Financial documents – Comprehensive picture of the financial activities of the company which helps in accurate VAT calculations. For example, cash flow, balance sheet, and profit and loss statement.
- Import and export declarations – Proof of import and payment done by the company products that are subject to VAT. Export declarations are documents that prove the zero-rating of VAT for exported products.
- Credit and debit notes – Documents used to make the necessary changes to previously dispatched bills due to errors, cancellations, or returns.
- Audited financial reports – For companies that are subject to external audit.
Penalty for Non-compliance
Here’s a detailed overview of the penalties associated with different violations related to VAT return filing Abu Dhabi:
- Failure to keep the required financial records – AED 10,000, followed by AED 50,000 for repeated violation
- Failure to submit documents when requested by the authorities – AED 20,000
- Late VAT registration – AED 20,000
- Late VAT De-registration – AED 10,000
- Failure to inform FTA of amendments in tax records – AED 5,000, followed by AED 15,000
- Late filing of tax return – AED 1,000, followed by AED 2,000 for repeated violation within 24 months
- Late VAT payment penalty – 2% of unpaid tax, 4% after seven days, 1% daily after one month, up to 300%
- Filing of incorrect VAT return – AED 1,000, and AED 2,000 for repeated violation
- Penalty for incorrect VAT return (based on percentage) – 50/30/5 depending on the timing of voluntary disclosure
- Submission of VAT Voluntary disclosure – AED 3,000, followed by AED 5,000 for repeated violation
- Penalty for VAT Voluntary disclosure (based on percentage) – 50/30/5 depending on the timing of disclosure
- Failure to voluntarily disclose errors before a tax audit – AED 3,000 + 50% of the unpaid amount and AED 5,000 + 50% of the unpaid amount for repeated violation
- Incorrect simplified tax invoice – AED 5,000
- Incorrect full tax invoice – AED 10,000
File your VAT return with the help of Shuraa Tax!
Shuraa Tax offers VAT return filing services in Abu Dhabi and thus can help you navigate the process efficiently and correctly. Their team of dedicated experts is well-versed in VAT regulations and therefore, can ensure that your company complies with all regulatory requirements.
Now confidently navigate the complexities of VAT return filing in Abu Dhabi with the guidance of Shuraa Tax. Contact them now at [email protected].
