The dynamic business environment of the United Arab Emirates offers opportunities for all types of businesses to thrive. Over the years, it has introduced several policies and initiatives to improve the efficiency and functioning of businesses in the country. With the implementation of Value Added Tax (VAT) in 2018, the UAE has brought its taxation system to par with international standards. Additionally, knowing all aspects of VAT including VAT return filing in Dubai has become a legal requisite for businesses. This knowledge can help them avoid legal troubles, thereby maintaining a good reputation with the tax authorities.
In this guide, we will cover the step-by-step method for filing VAT returns in the UAE, the essential documents required for the process, and the specific timeline determined by the tax authorities.
VAT return filing in Dubai
VAT return filing is a process where businesses submit a document to the FTA (Federal Tax Authority) summarizing all the sales and purchases made by them during a standard tax period. The document includes details of imports, exports, exempt supplies, input VAT, and output VAT.
Every VAT-registered business in the UAE is required to file their VAT returns once in each tax period. The duration of VAT filing in UAE is generally prescribed by the FTA, either monthly or quarterly, based on the annual revenue of the company.
VAT return filing in Dubai can be performed online through the FTA portal, EmaraTax. The business owner is required to complete the VAT return form, known as ‘VAT 201’, and submit it along with other credentials. This ensures accurate reporting of transactions and compliance with UAE VAT regulations.
Eligibility for VAT filing in UAE
Under the UAE tax regulations, all individuals and businesses registered for VAT are obligated to file VAT returns in the UAE, especially those with annual turnovers exceeding the registration threshold of AED 375,000. However, voluntary registration is also an option for those with an annual taxable turnover between AED 187,500 and AED 375,000. With voluntary VAT registration, businesses can gain various benefits. For instance, they can claim input VAT from the tax authorities. They can also avail the opportunity to work with larger corporations that prefer dealings with VAT-registered vendors.
Additionally, certain goods and services are exempted from VAT under the UAE VAT law. Companies that deal in such goods are absolved from VAT registration and VAT return filing in Dubai. Similarly, companies that deal in zero-rated supplies can also seek an exemption from these obligations. If approved, they can also free themselves from these tasks.
Dates for VAT return filing in Dubai – 2024
We have mentioned the crucial dates that you must take into consideration in order to ensure timely submission of your VAT returns in 2024:
Deadlines for Quarterly VAT filings:-
- January to March: 28th April 2024
- April to June: 28th July 2024
- July to September: 28th October 2024
- October to December: 28th January 2025
Deadlines for Monthly VAT filings:-
The deadline for monthly VAT returns is the 28th day of the month following the end of the tax period. If in case, the 28th day is a holiday, the next business day would be considered the final date for submission.
Deadlines for Annual VAT filings:-
In addition to quarterly returns, businesses are also required to file an annual VAT return as per the specified timelines.
Tax payments:-
Businesses must also ensure to complete their due VAT payments along with their VAT return filing in Dubai.
Missing these deadlines can have serious consequences, such as late fines, penal interest, etc.
Documents required for VAT return filing in Dubai
Keeping all the necessary documents and records at hand will ensure that the VAT filing process is smoother and more efficient. These include the following:-
- VAT registration certificate: An official document that certifies that the business is registered for VAT with the FTA. The certificate includes a unique Tax Registration Number (TRN), issued to the company during VAT registration.
- Business license: A legal document verifying the company’s legitimacy and eligibility to operate within the UAE.
- Financial records: A comprehensive record of all the business transactions including bank statements, debit notes, credit notes, and import/export documents that provide the necessary data for calculating the output tax and input tax for VAT return filing.
- Tax invoices: Copies of all tax invoices issued to the customers or received from the vendors. These bills help in determining the VAT amount collected and paid.
- Customs documents: Businesses involved in importing or exporting goods must maintain a record of all customs documents. These are necessary for assessing the VAT applied to imported goods.
- Expense receipts: All receipts of business expenses. These are helpful for claiming input tax credits.
Contents of the VAT returns form
The Form VAT 201 is the primary and fundamental document for VAT return filing in Dubai. This form is divided into various sections, each requiring specific information. For instance,
- VAT on sales and all other outputs: The details of VAT collected from customers on all taxable supplies including standard-rated, zero-rated, and exempt supplies made during the tax period.
- VAT on expenses and all other inputs: The details of the VAT paid to suppliers on all taxable purchases including standard-rated expenses and imports subject to reverse charges made during the tax period.
- Net VAT due: The net VAT due for the tax period, which is basically the difference between the output VAT (tax collected) and the input VAT (tax paid). If the output tax exceeds the input tax, the company needs to pay a different amount to the FTA. However, if the input tax exceeds the output tax, the company can claim a refund from the FTA or simply carry forward the difference amount to the next tax period.
- Additional reporting requirements: Applicable only under specific conditions. For example, businesses using the Profit Margin Scheme or transferring goods to other GCC countries may have to provide further details.
Discuss with the tax consultants at Shuraa Tax to confirm which requirements apply to your business.
VAT return filing checklist
Proceed with the following checklist to successfully submit your VAT return in the UAE:
- Confirm the relevant tax period and determine the applicable filing frequency based on the taxable supplies in the preceding year.
- Assemble all the documents and make sure they are well-organized and accessible.
- Reconcile the bank statements with the accounting records to identify and rectify any differences.
- Calculate the VAT amount payable on the taxable supplies.
- Identify recoverable input VAT on business-related expenses.
- Calculate the net VAT payable.
- Access the EmaraTax portal of FTA and log in using your credentials.
- Complete Form 201 with the requested details.
- Review the form for any typos or inconsistencies and submit it.
- Maintain copies of the submitted form and all supporting documents for business records.
Simplify VAT return filing in Dubai with Shuraa
VAT procedures in the UAE can be significantly simplified if you use the right tools and services. Shuraa Tax Consultants and Accountants is a leading provider of tax management solutions in the UAE, assisting businesses in managing their VAT obligations efficiently. Their tax experts streamline the entire VAT process and save clients from time-consuming tasks and costly errors. They also help generate accurate tax reports and financial statements and ensure that the business stays compliant with UAE’s VAT regulations.
If you want to experience a hassle-freeVAT return filing in Dubai, consider partnering with Shuraa Tax. Book a free consultation with their tax advisor at www.shuraatax.com
