VAT Return Filing in the UAE: A Guide

Want an easy guide to VAT return filing in the UAE? Whether your business is newly registered or already existing, this blog will equip you with the knowledge required to understand the process of filing VAT returns seamlessly. From preparing your return to choosing the most convenient filing method, navigate the process of VAT return submission with ease.

WHAT ARE VAT RETURNS?

A VAT return is mandatory for every taxable business and individual registered under VAT to submit a form to the Federal Tax Authority (FTA) at the end of each taxable period. This ‘VAT return’ represents a detailed summary of all the taxable supplies and purchases made by the concerned people during the tax period. The taxable person’s VAT liability is very carefully outlined in the form, therefore giving a clear picture of their VAT obligations during that period. The VAT return form has been named VAT 201 in the UAE.

Filing a VAT return is a crucial function for ensuring VAT compliance. By diligently meeting their obligations, taxable people fulfill their legal responsibilities and maintain complete transparency in the event of conducting business in the UAE.

WHO NEEDS TO FILE A VAT RETURN?

Every tax-payer registered for VAT, is required to file a return at the end of every tax period. However, it is subject to certain conditions. For instance, businesses exceeding a threshold of over AED 375,000 are mandated by UAE law to register for VAT.

The tax period however could vary from business to business, depending on the information furnished on the VAT certificate or stated by the FTA.

SIGNIFICANCE OF FILING VAT RETURNS

A taxable person or business needs to file VAT returns at prescribed intervals, subject to certain provisions in UAE. Filing VAT returns is not just important to prove the existence of a business in UAE, but also to safeguard the business from legal proceedings while enhancing its credibility and transparency. Filing VAT returns is crucial for several other reasons including:

Ensure compliance with the tax laws and regulations in the UAE
Maintain accuracy and transparency of financial records
Demonstrate the proof of existence to important stakeholders including the government and other legal bodies
Claim refund for input tax, therefore reducing the overall tax burden

ALSO READ: Rules For Corporate tax in the UAE

WHEN TO FILE VAT RETURNS?

Taxable individuals and businesses are required to file VAT returns within ’28 days’ of the prescribed ‘tax period.

As mandated by the FTA, taxable individuals and businesses are required to file VAT returns within ’28 days’ of the prescribed ‘tax period’. The standard tax period for VAT return filing in the UAE is as follows:

For businesses with an annual turnover below AED 150 million- QUARTERLY
For businesses with an annual turnover above AED 150 million- MONTHLY

However, it should also be kept in mind that if the due date falls on a government holiday or weekend, then the deadline is pushed to the next business day.

STEP-BY-STEP PROCESS TO FILE A VAT RETURN

The FTA has made it mandatory for every VAT-registered business to file their returns electronically through ‘Emaratax’ which is the official e-service portal of FTA. The process is simple and can be completed in the following steps:

Step 1: Using your registered name and password, you will need to log into the EMARATAX portal

Step 2: On the EMARATAX portal, select ‘VAT’ from the top menu bar, then choose ‘File’ for the return period

Step 3: Once you are done confirming the guidelines and the instructions, click ‘START’ to initiate your return process

Step 4: Depending on the selected type of VAT return, the window will display all the information relating to the filing period

Step 5: The template provided on the screen can also be downloaded and used offline. Once you have downloaded the template, fill in all the details and upload the file

Step 6: Once the process is completed, enter the VAT amount, the amount, and every other adjustment as required in the respective boxes

Step 7: Record the total amount of VAT recoverable including purchases from VAT-registered suppliers

Step 8: The system will automatically calculate the net VAT payable

Step 9: Review all the details entered and confirm the declaration by selecting the checkbox

Step 10: Click on ‘Submit’ to file your VAT return following which you will receive a confirmation message and reference number for your submitted return

Also please note, if the net VAT payable is positive, you will need to make the payment through the FTA’s e-portal gateway within 28 days of filing your return. You can choose from the multitude of options available to you including bank transfer, online banking, debit/credit card, etc. You need to also ensure to file the returns within the due date to avoid any penalties or additional expenses.

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Arnifi is digital first Corporate service provider helping companies enter the Middle East region, starting with UAE and Saudi Arabia markets. Founded and backed by professionals from Amazon, Souq and other large companies operating in KSA – the team understands what it takes to succeed as a startup in both UAE and Saudi Arabian markets, apart from going through the setup process multiple times. Arnifi will provide a truly digital experience to entry and scale up of companies both UAE and Saudi Arabia. The Arnifi promise is simple, yet revolutionary, use technology and a great team to provide transparency, efficiency and great customer experience in the whole process. Check out at – www.Arnifi.com for more details.