How to File VAT Returns in UAE?

VAT return filing in Dubai or UAE is an important obligation for businesses operating in the United Arab Emirates (UAE). As a progressive and modern country, the UAE has implemented a tax system that aligns with international standards. Therefore, the UAE introduced its tax system to diversify its revenue streams and support its economic growth.

If your business is registered for VAT with the Federal Tax Authority (FTA), you need to file VAT returns regularly. This means reporting the VAT you’ve collected from your sales and the VAT you’ve paid on your purchases. Knowing how to file VAT in the UAE correctly is essential for staying compliant with the tax regulations.

Currently, the authorities have set the VAT registration threshold at AED 375,000 per annum. Failure to file tax returns or comply with the country’s tax laws may result in penalties and fines. That’s why understanding the VAT filing process is crucial for businesses in the UAE.

What is a VAT Return?

A VAT return is an official form that businesses registered for Value Added Tax (VAT) in the UAE must submit to the Federal Tax Authority (FTA). This form provides details of a business’s taxable activities during a specific period, including:

• The total VAT collected on sales (output tax).
• The total VAT paid on purchases (input tax).
• The difference, which determines the VAT payable to the FTA or refundable from the FTA

The main purpose of a VAT return is to ensure that businesses comply with the UAE’s tax regulations by accurately reporting their VAT transactions. It also helps the FTA monitor and regulate the flow of VAT across different industries.

Who Needs to File VAT Returns in the UAE?

Any business or individual registered for VAT in the UAE is required to file VAT returns. This includes:

• Businesses with an annual turnover exceeding the mandatory VAT registration threshold of AED 375,000.
• Voluntarily registered businesses with a turnover above AED 187,500.

Frequency of Filing VAT Returns

• Quarterly: Most businesses file VAT returns every quarter, covering three months of transactions.
• Monthly: Larger businesses with a high turnover may need to file VAT returns monthly.

Important dates for VAT Return Filing in UAE

To file VAT returns in UAE, it’s crucial to be aware of the deadlines. The deadline to file monthly or quarterly VAT returns is always the 28th day of the month following the end of the VAT return period. The due date will be the next business day, if the 28th day falls on a public holiday or weekend. For instance, if you’re submitting a quarterly VAT return for the period between February to April, you need to file it by May 28th.

If your first tax period falls between January 1, 2024, and Jan 31, 2024, you must file your VAT return on or before February 28, 2024 (or the next business day if February 28 falls on a public holiday or weekend).

However, in some cases, a business’s first tax period may exceed three months. For example, if your first tax period falls between January 1, 2024, and April 30, 2024, you must file your VAT return on or before May 28, 2024 (or the next business day if May 28 falls on a public holiday or weekend).

Pre-requisites for Filing VAT Returns in the UAE

Before you can file your VAT returns in the UAE, there are a few important steps to ensure you’re ready. Here’s what you need:

1. VAT Registration with the Federal Tax Authority (FTA)

To file VAT returns, your business must first be registered for VAT with the FTA. This involves obtaining a Tax Registration Number (TRN), which serves as your business’s unique VAT identification. Without this, you cannot file VAT returns or fulfill your tax obligations.

2. Accurate Record-Keeping

Maintaining accurate and up-to-date records of your business transactions is essential. These include:

• Sales Records: Details of taxable and exempt sales.
• Purchase Records: Invoices for expenses that include input VAT.
• Expense Records: Any additional costs related to your business operations.

These records are the foundation for calculating VAT owed or refundable and must be retained for at least five years for audit purposes.

3. Access to the FTA e-Services Portal

The FTA e-Services portal is the official platform for submitting VAT returns in the UAE. To use it, you’ll need:

• A registered account on the portal.
• Your Tax Registration Number (TRN) and login credentials.

How To File VAT Return in UAE?

VAT return filing in Dubai or UAE is a straightforward process when you follow these steps:

Step 1: Log in to the FTA e-Services Portal

Visit the official FTA e-Services portal. Enter your Tax Registration Number (TRN) and password to access your account.

Step 2: Navigate to the VAT Returns Section

Once logged in, go to the “VAT Returns” section on the dashboard. Select the VAT return form (VAT 201) for the relevant tax period.

Step 3: Fill in the VAT Return Form

The VAT return form is divided into sections where you need to provide the following information:

Taxable Sales and Output Tax:

• Enter the total value of your taxable supplies (sales) and the VAT collected from customers.
• Provide details for standard-rated supplies within the UAE and exports.

Purchases and Input Tax:

• Enter the total value of your taxable purchases and the VAT paid on them.
• Ensure this includes expenses eligible for VAT recovery.

Net VAT Amount:

The system will calculate the difference between output tax and input tax to determine the VAT payable or refundable.

Step 4: Review the Form

Double-check all the details for accuracy. Ensure there are no discrepancies between your records and the information entered. 

Step 5: Submit the VAT Return

Click on “Submit” to file your VAT return. Once submitted, you will receive a confirmation message from the FTA.

Step 6: Make the Payment (If Applicable)

If your VAT return shows a payable amount, proceed to make the payment through the FTA portal. Payment can be made via:

• E-Dirham or credit card.
• Bank transfer using the provided GIBAN (Generated International Bank Account Number).

Step 7: Retain a Copy for Records

Save a copy of the filed VAT return and payment receipt for your records. These may be required during audits or for future reference.

File your VAT return before the deadline to avoid penalties. If you notice errors after submission, you can correct them by filing a Voluntary Disclosure through the FTA portal.

The VAT Returns in UAE Contents

The following two sections are in a VAT return in UAE: –

• The first section is the main section, which includes the taxpayer’s details, sales, purchases, and net VAT due. Moreover, the main section is mandatory for all VAT-registered businesses in UAE.
• The second section is the additional reporting requirements section, which only applies to certain businesses under specific conditions. Furthermore, this section includes fields related to the profit margin scheme.

Main

When you file VAT returns in UAE, the main section contains all the necessary details pre-populated with the taxpayer’s data, including the tax year-end VAT stagger, tax form filing type, and submission date. In a UAE VAT return, the section that captures the taxpayer’s information is called Taxable Person Details.

This section includes the Tax Registration Number (TRN), name of the business in both English and Arabic, registered address or place of residence of the business.

VAT on Sales and all other Outputs

The VAT on Sales and all other Outputs section of the VAT return should contain details of all sales and supplies made by the taxpayer during the tax period.

• The first column is for the total sales transaction amount which includes sum of sales value due to debit or credit notes. The second value is the VAT amount that has been collected, which also includes any changes to the VAT collected due to changes in the taxable value captured in the previous column.
• Finally, the third value shows any adjustments made to output tax or VAT collected during the earlier tax period.

VAT on Expenses and all other Inputs

This series of sections present information on all VAT on purchases and expenses made during the tax period.

• The total vatable business purchase amount is based on purchase invoices, which include any adjustments due to debit or credit notes from suppliers or corrections from previous tax periods.
• The Recoverable VAT Amount, or the number of VAT refunds that can be claimed according to VAT law.
• Any adjustments made to the input tax (VAT paid on purchases).

Net VAT Due

Calculating the net VAT due is crucial in determining the amount of VAT a taxpayer owes to the government. To calculate the net VAT due, the total recoverable VAT is subtracted from the total output VAT payable. Furthermore, if the output VAT payable is higher than the recoverable VAT, the difference is the net VAT due, and you will need to make a payment to the government.

The government may refund or carry forward a VAT credit to future VAT periods if their recoverable VAT is higher than the output VAT payable. This section helps to ensure that businesses accurately report and pay their VAT obligations in accordance with the law.

Additional Reporting Requirements

To comply with tax regulations, businesses that sell secondhand goods and have enrolled in the profit margin scheme must complete this section. They need to select “yes” to indicate their enrollment under the scheme, which applies VAT only to the profit made during sales of secondhand products.

How to Correct Errors in VAT Returns in the UAE

Mistakes in VAT returns can happen, but it’s important to correct them promptly to avoid penalties and stay compliant with the UAE tax system. The Federal Tax Authority (FTA) allows businesses to correct errors through a process called Voluntary Disclosure. Here’s how you can do it:

1. Log in to the FTA e-Services Portal

Use your Tax Registration Number (TRN) and password to log in to your account. Once logged in, go to the “VAT” section and select the “Voluntary Disclosure” option.

2. Select the Relevant VAT Return

Choose the VAT return period where the error occurred.

3. Explain the Error

Clearly describe the mistake, including the nature of the error (whether it’s related to sales, purchases, input tax, output tax, etc.). Specify the correct figures and how the error occurred.

4. Submit the Voluntary Disclosure

Review the information and submit the disclosure. The FTA will assess the correction and may require additional documentation or clarification.

5. Pay Any Additional VAT

If the correction results in more VAT being owed, ensure that the payment is made promptly to avoid further penalties.

Situations Where Corrections Are Necessary

You must file a voluntary disclosure if any of the following situations occur:

• Incorrect Calculation of VAT Payable or Refundable (e.g., input tax claimed incorrectly, or sales figures misreported)
• Omissions or Underreporting of Taxable Transactions
• Incorrect VAT Classification (e.g., zero-rated supplies reported as taxable)
• Overclaiming Input Tax
• Late Registration

You must file a voluntary disclosure within 20 business days from the date you become aware of the error.

How Shuraa Tax Can Help

Knowing how to file VAT in the UAE on time is very important for your business in the UAE. It helps you stay compliant with the tax rules, avoids fines, and keeps your business running smoothly. If you miss the deadline or make mistakes, it can lead to penalties that can affect your finances.

We understand that VAT filing can be tricky, and even small errors can cause problems. That’s why it’s a good idea to get professional help. Hiring a professional VAT consultant ensures your filings are done correctly and on time, giving you peace of mind and helping you avoid costly mistakes.

At Shuraa Tax, we offer a complete range of VAT services, from registration and filing to making sure you stay compliant. Our team of experienced professionals will make the entire process easy and hassle-free. Whether it’s your first VAT return filing in Dubai or need ongoing assistance, Shuraa Tax is here to help. Get in touch with us today +971 508912062 or info@shuraatax.com to simplify your VAT process and keep your business on track.