How To File VAT Return in UAE

VAT (Value Added Tax) is levied on the consumption of goods and services. Whether it is an established business or a new business, VAT return filing can be a very beneficial task for the business because it helps in building a good picture of the business in the government’s eyes, as well as the current and potential investors. If you are wondering how to file VAT return in UAE, as it is important for every business, then here, we have brought a complete guide for you that will surely help you to understand the process of VAT return filing in the United Arab Emirates.

Countries in the Middle East, especially in the UAE, that have been working tirelessly to establish themselves as a trade center, have understood the significance of filing VAT. Realizing this, the GCC countries have entered into VAT law and have agreed to a 5% rate of VAT. If you are planning your business for the UAE, you need to be aware of filing VAT returns and the procedures related to VAT.

Take a look at the conditions and procedures for VAT return filing and why it was accepted globally.

VAT Return Filing

Sometimes the business can pay additional taxes, such as VAT, but later, such taxes may be reimbursed. This procedure is known as VAT return filing, in which the business position how much additional tax it paid to the relevant authority. In simple words, the filing of a VAT return positions how much VAT is to be paid or reimbursed by the tax officials for the business. A VAT return is completed quarterly, and it assists the business in tracking its VAT method.

VAT is also levied for business entities involved in the activities of the business with other nations. This is better to comply with VAY while doing these activities so as to avoid any type of penalty that may come in the way. All the businesses that are registered already for VAT are required to file VAT returns irrespective of the kind of VAT registration Dubai, UAE or purchases and sales, input tax, output tax, and more. In order not to make mistakes while filing the return, the management can seek the help of professional advisors.

Calculation of Liability to File VAT Return in UAE

The taxpayers are liable for computing the VAT return in the UAE throughout the filing procedure. This is calculated taking into account the following factors:

• The total purchases and sales of your business in the concerned return tenure.
• The VAT amount you pay for sales.
• The VAT amount you can claim for the purchases made.

Lastly, if you pay more VAT than you are capable of claiming, you will have to pay the difference. In case the situation goes the other way, you may either ask for a refund of the additional VAT or carry forward the excess to the next refund tenure.

The Process to File VAT Return in UAE

Businesses can file their VAT return on the online portal using the FTA (Federal Tax Authority) portal, where the VAT 201 form will be found. To access this form, you need to log in to the FTA e-service portal and choose the VAT option. Then a drop-down menu would appear from which the business needs to select VAT 201. The business then needs to select VAT return in the navigation. For VAT filing in UAE, you need to submit some important information such as information of a taxable person, VAT return tenure, VAT on sales and all other outputs, VAT on expenses and all other inputs, Net VAT due, any other reporting needs, declaration, and authorized signatory.

Once the VAT return form is duly submitted, you will get an email from the Federal Tax Authority to confirm the VAT return form submission. After submission of the return, you have to pay the tax due, if any, by one of the several payment channels such as E-dirham, online bank transfer, exchange houses, over-the-counter bank payment, and more.

Benefits of Filing VAT Return in UAE

• VAT adherence brings with it some business goodwill. Several big firms are often reluctant to do business with VAT-registered companies.
• The business form gets highlighted after getting registered under the law of VAT.
• VAT is easier to handle than other indirect taxes.

Hence, you can see how vital it has become for businesses to implement the process of VAT filing in the UAE and be VAT adherence when doing multi-national businesses. VAT filing not just secures your business but also provides legal support and proof of the existence of your business, and it gives an upper hand in the field of tax payment and avoids a financial loss. Reliable firms like Hisab Taskmaster CA Advisors can assist you in managing VAT compliance smoothly and professionally, helping you stay ahead of tax regulations.

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