VAT Returns in UAE: Simplified Guide for Businesses

The implementation of the Value Added Tax (VAT) system in the United Arab Emirates (UAE) has made it imperative for businesses to understand and adhere to the process of filing VAT returns accurately and punctually. A VAT return serves as a formal declaration outlining a business’s taxable sales and purchases within a specific timeframe. By fulfilling their VAT return obligations, businesses not only comply with UAE tax regulations but also ensure the proper functioning of the VAT system.  

It is mandatory for all companies to file VAT returns in UAE promptly to avoid penalties. This entails taxable companies making timely tax payments and submitting their returns by the deadline, which is typically the 28th day of the month following the end of the respective Tax Period. Compliance with these requirements is crucial for businesses to maintain regulatory compliance, prevent any negative consequences, and fulfil their tax responsibilities effectively. To assist businesses in this process, this comprehensive guide provides a step-by-step approach to filing VAT returns in UAE. It covers essential aspects such as the VAT return form, VAT filing in UAE, procedure, and considerations related to VAT on sales and other outputs. 

What is a VAT Return Form? 

The Form VAT 201  in the UAE is broadly categorised into 7 sections, each serving a specific purpose in reporting taxable sales and purchases. These sections are: 

1. Tax Period: It will be auto captured.
2. Output VAT: This section focuses on reporting the VAT collected on taxable sales. Businesses must provide the total value of standard-rated sales, zero-rated sales, and exempt sales, along with the corresponding VAT amounts. It is obligatory to mention local taxable sales emirates-wise and corresponding VAT.
3. Input VAT: Here, businesses report the VAT paid on eligible business purchases. This includes input VAT on goods and services acquired for business purposes, which can be offset against the output VAT liability.
4. Adjustments: If any adjustments need to be made to previously reported amounts, bad debts adjustments, or adjustments in capital scheme. This section allows businesses to provide details and explanations for such changes.
5. Import details: Descriptions 3, 6 and 7 are dedicated to mentioning imports of goods and services, and adjustments. Details of imports linked with TRN will auto-populate.
6. Total VAT Due and Refunds: Businesses calculate the net VAT liability or the refundable amount by subtracting the input VAT from the output VAT. This section displays the total VAT due or the refundable VAT, if applicable.
7. Profit margins: The business needs to mention if the profit margin scheme is applied for reportable tax period.
8. Declaration and Signature: The final section requires the authorised person to declare the accuracy of the information provided and affix their signature, acknowledging their responsibility for the contents of the VAT return.
9. By organising the VAT returns in UAE into these distinct sections, Form VAT 201 streamlines the reporting process, ensuring that businesses can accurately report their taxable sales and purchases in a structured manner. 

Key Filing Dates for VAT Returns in the UAE

1. Monthly and Quarterly Deadlines: For both monthly and quarterly VAT returns in the UAE, the deadline for filing is set as the 28^th day of the month following the end of the VAT return period. For example, if you are filing a quarterly VAT return for the period from February to April, the deadline for filing this return would be the 28th of May. In the case of public holidays or weekends on the 28th day, then deadlines will be extended to the following working day.
2. First Tax Period: The first tax period can vary for each business based on individual instructions received from the Federal Tax Authority (FTA). For instance, if your first tax period is from January 1 to January 31, you must file your VAT return for this period on or before February 28/29. If your first tax period is Jan- Mar 23, then VAT return will be due by 28^th April (or the next business day if February 28 falls on a public holiday or weekend).
3. Extended Tax Period: In some cases, the first tax period for a business may span more than three months. For example, if your first tax period is from January 1, 2018, to April 30, 2018, you must file your VAT return on or before May 28, 2018 (If May 28 falls on a public holiday or a weekend, the deadline for filing the VAT returns in the UAE, whether it is monthly or quarterly, is extended to the next business day).

It is crucial for businesses to adhere to these important filing dates to ensure the timely submission of VAT returns and avoid any penalties or non-compliance issues. 

Overview of Sections in the VAT Return Form: Pre-Populated Data and Taxpayer Details

• Main Section: Pre-Populated Data In the main section of the VAT Return Form, you will find pre-populated details specific to your business. This includes information such as the form type, Address, Contact number, and submission date. These details are automatically filled in based on your data, ensuring accuracy and efficiency in the filing process. 
• Taxable Person Details Section: The Taxable Person Details section captures essential information about your business. It includes your Tax Registration Number (TRN), Company’s name in both English and Arabic, the registered address or place of residence of your business, the name of the tax agency, the Tax Account Number (TAN), the name of the tax agent, and the Tax Agent Approval Number (TAAN). These details are also pre-populated based on the information provided during registration. 
• VAT Return Period Section: The VAT Return Period section displays important details related to the tax year and the specific VAT returns in UAE period, whether it is a monthly or quarterly period It also includes the VAT return period reference number, which allows you to make adjustments and recover tax at the end of the tax year based on any necessary corrections made throughout the year. 

Step-by-Step Guide to Filing VAT Return in UAE using Form VAT 201

1. Accessing the VAT Return Form 201 on the FTA e-Services Portal 

To access the VAT Return Form 201 and initiate the VAT return filing in UAE process, taxpayers should follow these steps: 

1. To access the FTA EmaraTax e-Services portal, please log in using your registered username and password.
2. Navigate to the Form Navigation menu. Select your company name.
3. Select ‘VAT’ from the menu options on the left.
4. Choose ‘My fillings’ from the available options. Click on ‘View all’
5. Unfiled return will not have any VAT reference. Click on ‘file’ under action column.
6. Click on ‘VAT 201 – New VAT Return’ to initiate the VAT return filing in the UAE process.
7. Tick on ‘I confirm that I have read the above instructions and guidelines’ 

8. Click ‘ Start’ 

By following these instructions, taxpayers can easily access the VAT Return Form 201 on the FTA e-Services portal and commence the VAT filing in UAE process.

 
2. Taxable Person Details 

• The VAT Return Form includes a section dedicated to capturing the details of the taxable person.
• Information such as the taxpayer’s “TRN” (Tax Registration Number), name, and address are automatically filled in this section. 
• If a tax agent is submitting the VAT return on behalf of the taxpayer, the form allows for the inclusion of the tax agent’s information. 
• This automated population of data ensures accuracy and efficiency in recording the details of the taxable person and any associated tax agent. 

3. VAT Return Period 

• The VAT Return Form includes a section dedicated to the VAT return period. 
• The details in this section, such as the VAT return period for which the return is being filed, the Tax Year end, the VAT return period reference number, and the VAT return due date, are auto populated. 

4. Reporting VAT on Sales and Other Outputs 

VAT on Sales and Other Outputs: This series of sections within the VAT Return Form is designed to capture and report the details of all sales and supplies made by your business during the specific tax period. These sections provide a comprehensive breakdown of the taxable transactions, ensuring accurate reporting of VAT-related information. 

Table Format: Total Transaction Amount, VAT Amount, and Adjustments under the VAT on Sales and Other Outputs sections, the information is presented in organised tables. These tables display three key values for each transaction: 

1. Total Transaction Amount (AED): This value represents the total amount stated on the invoices issued during the tax period. It includes any adjustments, such as increases or decreases in value due to debit or credit notes.
2. VAT Amount Collected (AED): This value represents the VAT collected on the sales and supplies made during the tax period. It encompasses any changes to the VAT collected resulting from modifications in the taxable value.
3. Adjustments to Output Tax (AED): This value accounts for any adjustments made to the output tax or VAT collected. It allows for the reporting of modifications that may impact the overall VAT liability due to capital scheme and bad debts adjustments.
4.  VAT on Sales and All Other Outputs:

In the preceding section, provide the necessary information pertaining to taxable supplies at the Emirates level, including standard rates, zero-rated supplies, exempt supplies, supplies subject to the reverse charge mechanism, and any other relevant details. 

5. VAT on Expenses and All other Inputs 

This set of sections encompasses all your purchases and expenses made during the tax period. The information is presented in tables, highlighting the following three values: 

1. Total Purchase Amount (AED): Derived from your purchase invoices, accounting for any changes in value due to debit or credit notes issued by suppliers, as well as corrections from previous tax periods.
2. Recoverable VAT Amount (AED): Represents the VAT refunds you are eligible to claim in accordance with the VAT law.
3. Adjustments (AED): Reflects any modifications made to your input tax (the VAT amount paid on purchases) from earlier tax periods. 

6. Net VAT Due

a. Box number 12: The Total Value of tax due for the specified period 

• Represents the total value of output tax due for the Tax Period.
• It’s derived from the data provided in the Sales and all other outputs section.
• Computed by summing the Output VAT and Adjustments columns in the Sales and all other outputs. 

b. Box number 13: The Total value of tax recoverable for the given period 

• Indicates the total value of Input Tax that is recoverable for the Tax Period. 
• Calculated based on the details provided in the VAT expenses and all other inputs section. 

c. Box number 14: Payable tax for the period 

• Represents the difference between the total tax due for the period (Box 12) and the total recoverable tax for the period (Box 13). 
• This value determines whether there is a net VAT payable or recoverable tax which is VAT refund.

NOTE 

1. If the amount in Box 12 is greater than the amount in Box 13: The difference indicates the amount of VAT that you must pay.
2. If the amount in Box 12 is less than the figure in Box 13: 

• You become eligible to request a refund for the net amount of recoverable tax.
• Alternatively, you can carry forward the recoverable tax to the subsequent VAT return period. 

7. Additional Reporting Requirement

This section applies exclusively to businesses that have utilized and implemented the Profit Margin Scheme during the specified period. If you haven’t utilized this scheme, you can simply select ‘No’ and proceed to the next section. 

8. Declaration and Authorized Signatory 

 
In this section, furnish the authorised signatory details and mark the checkbox in the declaration section to submit the VAT Return. It is also possible for the taxpayer to save the details as a draft for submission at a later time.

Before finalising and submitting the VAT Return, it is crucial for taxpayers to exercise caution and thoroughly verify all the details provided. Only when they are certain that all the information is accurate should they proceed to click the submit button. Upon successfully filing the VAT Return, a confirmation email will be sent by FTA (Federal Tax Authority) to the taxpayer, acknowledging the submission of the VAT return form.

VAT Return Filing in Dubai, UAE

Filing a VAT return in UAE is a detailed and intricate process that requires careful attention. It is crucial for businesses to seek expert advice before submitting their VAT return to avoid potential errors that may result in substantial fines and penalties imposed by the Federal Tax Authority (FTA). Shuraa Tax is a reputable audit and accounting company based in Dubai, offering reliable VAT Return Filing Services that comply with FTA regulations. Contact Shuraa Tax Consultants right immediately to file a VAT return in Dubai! All you need to do is contact us at info@shuraatax.com or call us on +971 508912062.

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