VAT Return Filing in UAE

VAT Return Filing in UAE

The consumption of goods and services is subject to Value Added Tax (VAT). Whether a new or existing business, filing a VAT return may be a highly beneficial move for the company because it helps to build a positive image of the company in the eyes of the government as well as current and potential investors. VAT is now recognised all around the world, with more than 180 nations accepting the system.

The importance of VAT filing has been recognised by Middle Eastern governments, particularly the United Arab Emirates, which has worked relentlessly to establish itself as a corporate hub. Recognizing this, the GCC countries enacted VAT legislation and agreed on a 5% VAT rate. If you’re planning a business in the UAE, you should be aware of the VAT return filing and other VAT-related procedures.

What is the difference between VAT Return Filing and VAT Compliance?

Extra taxes, such as Value Added Tax (VAT), are frequently paid by businesses, but these costs are often refunded later. VAT Return Filing is the process through which a company declares how much more it paid to the relevant authority.

VAT Due/Liability

During the filing procedure, the taxpayer is in charge of calculating the VAT return. It is determined by taking into account the following factors: 

Who Is Required to File a VAT Return?

Regardless of the type of VAT registration or sales, purchases, output tax, input tax, etc., all businesses that have already registered for VAT are required to file VAT returns. Management might enlist the help of experienced advisors to ensure that no errors are made when filing taxes.

VAT Return Filing in the United Arab Emirates?

Businesses can file their VAT returns online through the Federal Tax Authority (FTA) webpage, where the VAT 201 form can be found. To obtain this form, the taxpayer must first log into the FTA e-Services portal and then select the VAT option. After that, a drop-down option will appear, from which the company must choose VAT 201. Following that, the company must select VAT Return from the navigation menu.

It is necessary to fill in the following information:

The taxpayer will receive an e-mail from the FTA verifying the submission of the VAT return form once it has been properly filled out and submitted. The tax payer must pay the appropriate tax, if any, through one of the several payment channels available, such as E-dirham, exchange houses, online bank transfers, over-the-counter bank payments, and so on, after completing the return.

Sections of the VAT 201 Form

The following are the details that must be filled out on VAT Form 201:

  • Information on the Taxable Person

    Initial information such as the Tax Registration Number (TRN) is necessary. If a tax agent is submitting documents on the taxpayer's behalf, the Tax Agent Approval Number (TAAN) and the name of the tax agency are necessary.

  • Return Period for VAT

    The VAT Return Period is critical for any firm since it establishes a deadline for filing a return and aids the entity in keeping track of its filings.

  • Value Added Tax (VAT) on Sales and All Other Outputs

    Details about normal tax supplies must be provided on an Emirates-by-Emirates basis

  • Value Added Tax (VAT) on Expenses and All Other Inputs

    The specifics of the purchases purchased, as well as the 5% tax, must be provided here.

  • Due Date for Net VAT

    There are two sections to this section: VAT payable and VAT recoverable. The tax that is due to the tax authority for the tax period is listed in the VAT payable part, whereas the entire value of input tax that is recoverable for the tax period is listed in the VAT recoverable section. The difference between these two portions would result in a net VAT due or recoverable amount.

  • Additional Requirements for Reporting

    For enterprises that applied for the Profit Margin Scheme during the VAT period, this section is critical. It doesn’t have any financial consequence.

  • Authorized Signatory and Declaration

    Before submitting the documents for VAT filing, the approved signatures must be inked on them. Before submitting the documents, the taxpayer should double-check them. The option to save the information as a draught and submit it later

The Advantages of Filing a VAT Return

VAT compliance is associated with a certain amount of corporate goodwill. In reality, many multinational corporations are hesitant to do business with non-VAT-registered businesses. Once a firm is registered under VAT law, its image is enhanced. In comparison to any other indirect tax, VAT is easier to manage.

As a result, you can see how critical it is for firms to adopt the VAT filing process and to become VAT compliant when conducting multi-national operations. VAT filing not only protects your business, but also provides legal assurance and proof of your company’s existence. It also gives you an advantage in terms of tax payments and helps you avoid financial loss. 

Accroun has been working as a business consultant for over a decade, assisting firms with their accounting, taxation, and financial needs. VAT is a time-consuming procedure. Our company specialists would start from the ground up and make the situation far more manageable. Accroun seeks to provide you with the transparency, control, and better understanding of your company dealings that will help you optimise your profits while lowering your costs. Please contact us to begin the process; we’ll be pleased to help.

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We will assign a dedicated and qualified team to your entity, who will assist you in ensuring statutory compliance and providing necessary management reports.