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VAT in UAE: Complete User Guide on VAT Return Filing

VAT Return Filing

VAT (Value added tax) was introduced into the UAE on the 1st January 2018. As of this date all businesses that sell a product or service and exceed a pre-determined annual turnover are required to charge an additional 5% VAT to all buyers. Alternatively when a business is buying goods and services they will be paying VAT to the corresponding business.

All business that have a turnover exceeding AED 375,000 per annum will need to register for VAT. J Corp can handle your VAT registration in Dubai for you.

All VAT transactions will be required by law to be carefully recorded and periodically submitted to the Government as a VAT return. This is so the Government can gauge how much VAT you have received, versus how much you have paid. Any remaining portion is payable back to the Government on a quarterly basis, or refunded to you.

VAT Filing and how it works

All registered businesses are responsible for filing a VAT return electronically through the FTA portal at the conclusion of each month or quarter depending on their size: (quarterly for businesses below AED150 million, monthly for businesses above AED150 million.)

You have 28 days past your tax period end date to file your VAT, so if your quarter finishes on March 31st, you have until April 28th to file.

An individual or business does not have to complete their VAT filing themselves, they can also authorize a representative to file on their behalf through a certified VAT accountant. By utilizing a certified accounting firm a business can ensure their VAT is submitted on time and without errors.

What happens if I don’t register or file VAT

VAT compliance in the UAE has become mandatory if your business has an annual turnover of more than AED 375,000 per annum. If this is the case and you do not register for VAT, or you do not register correctly you will be risking a high penalty from the tax authority.

If you are registered and you fail to file your VAT within the 28 day time frame you will be risking penalties of AED $1,000 for first time offenders and an increase in that if a late return is filed again.

What do I need to know about VAT filing?

When filing your VAT through the online portal you need to take care to follow some basic guidelines.

You need to:

  • Show all amounts in United Arab Emirates Dirhams (AED)
  • Round off all amounts to the nearest dollar
  • Complete all mandatory fields
  • Make sure your enter “0” if there is nothing to declare.

When completing your VAT return you must make sure you have included all business transactions, both outgoing and incoming, on your spreadsheet and clearly identify what portion of each sale or purchase was VAT.

If you are unsure as to how to file, or where to go please make sure you call an experienced accounting firm to help. We offer all levels of VAT Compliance, VAT Filing services and Accounting services in Dubai.

What happens once I file my VAT return?

Once your VAT return has been filed a calculation will be made between the VAT you received and the VAT you paid. The difference between these 2 amounts will be payable to the tax office, or subject to refund to  you, the business owner. In the reuslt of a rfund you will have the choice to take the refund straight away or roll it over into your next tax period to offset VAT in the coming quarter.

VAT payment will be made through the e-dirham payment gateway which supports Visa, Mastercard or e-Dirham card.

What now?

VAT registration and VAT filing in the UAE can be a little tricky so we’re here to help you through. J-Corp has qualified staff that understand all the tax laws within the UAE and can help you navigate your VAT concerns quickly and efficiently freeing up your time to focus on your business.

We are a full accounting service and are here to help anyway we can, so please give us a call with your concerns and we can make sure your business complies with the new VAT laws in Dubai.