Do you know how often you submit VAT returns? Knowing the right schedule for filing VAT Return in UAE will keep you away from fines and end up on the right side of the compliance scale. We shall explore within this article the VAT return frequency, the steps involved in VAT returns, and how to be on top of your tax obligation. It will make you aware of the frequency of filing VAT returns. So, all the processes would not hurt or be painful at the end of this business guide.
What Is VAT Return Filing?
VAT return filing in the UAE offers information regarding VAT return filing from businesses with the Federal Tax Authority, or FTA. The VAT return in the UAE needs to be submitted for FTA validation, to ensure that the businesses collect the right amount of VAT from customers and pay the correct amount of VAT to the suppliers. A business would then be compelled to file its VAT returns within a particular time frame, which in the United Arab Emirates is quarterly or monthly so long as that fits its turnover.
Filing Periods for VAT Return in the UAE
The VAT Return filing frequency in the UAE is mainly determined by your company’s annual turnover. In the UAE, most businesses file their VAT returns quarterly, while large-scale companies with high turnovers must file monthly.
Quarterly VAT Return Filing
Businesses whose annual turnover is less than AED 150 million are required to make VAT returns quarterly. The compulsorily VAT quarters are.
- January to March
- April to June
- July to September
- October to December
Therefore, your business must file its UAE VAT Return Filing four times a year. Each of the filings must be submitted within 28 days after the quarter’s end.
Monthly VAT Return Filing
Businesses with a turnover above AED 150 million must make VAT returns in the UAE every month since such businesses post a high number of transactions and, therefore, require that more frequent reporting to the FTA be made. Returns ought to be submitted within 28 days after the end of each month; thus, there are 12 submissions made during each year.
Key Documents for VAT Return Filing
- VAT Return in the UAE: When submitting a return, all documents must be collected so nothing goes amiss. You will
- Tax invoices: Sales accounts will reflect the collected VAT.
- Purchase receipts: VAT paid by the suppliers.
- Details of input and output VAT: Indicates total VAT collected and paid.
- Exempt and zero-rated sales: Keeping the same record is necessary.
If you maintain an adequate record of the various VAT periods, then you will be able to streamline VAT Return filing in the UAE and avoid mistakes.
Common Mistakes When Filing a VAT Return
Many businesses operate with expensive errors while managing VAT Return filing in the UAE. The most common mistakes include:
- Incorrect VAT calculations: Miscalculation of the amount of VAT payable or recoverable is likely to attract a penalty.
- Overdue submissions: In the UAE, VAT return delays might incur huge penalties.
- Exempted sales not recorded: Unaccounted exempt or zero-rated sales will result in incorrect submissions.
VAT Return Filing Errors
To avoid these problems, businesses have to maintain accurate, updated records. The review of these records before submission ensures that everything is correct and, therefore, reduces the chances of errors. Most companies deal with a VAT consultant or accounting professional to ensure smooth VAT Return filing in the UAE. For more business Insights, You can quickly check this out.
Penalties for Late VAT Return Filing
Failure to submit within the set deadline for filing VAT Return in UAE may attract penalties based on the offense committed, which range from AED 1,000 for the first time and hundreds of thousands of AED for repeated offenses. Also, fines are accumulating over time, so returns submitted late add up fast. Thus, businesses need to be paying attention to deadlines and file their returns accordingly.
What are the Advantages of Filing VAT Returns Early?
But aside from being legally required, timely filing of your VAT return is important to your business on several levels. Here are the reasons why:
Avoidance of Fines and Penalties
Your business will lose so much money if VAT returns are filed way beyond the specified times. Such unnecessary fines will draw your business away from staying compliant on all levels of the law.
Enhanced Financial Planning
This will also make it easier for you to have an idea of managing the cash flow. This gives you a clear picture of the VAT owed or refundable and therefore, allows you to be more specific on financial decisions.
Improved Business Reputation
Companies that always follow the rules for filing VAT Return in UAE become well-known concerning professionalism and reliability, which can strengthen further relationships with clients and partners, implying further opportunities in business.
Tools to Simplify VAT Return Filing
The proper tool can make VAT returns easier. With many solutions providing ways to handle filing VAT Return in the UAE, things can be simplified by:
- FTA e-Services Portal: This is the government portal through which VAT return submissions happen in the UAE. It’s indispensable that businesses must be conversant with this system.
- Accounting Software: There are software such as Zoho Books and QuickBooks that provide VAT compliance features, making it easier for you to smoothly go about the filing VAT Return in UAE process.
- Professional Assistance: VAT experts can guide you through complicated VAT situations, and your filing can always be error-free and in strict adherence to the regulations.
Conclusion
The VAT Return needs to be filed in the UAE in time and without mistakes to ensure that your business does not fail to comply with taxes. If the business must file returns quarterly or monthly, being highly organized keeps things easy and saves you from having to pay penalties. Utilizing tools and expert assistance further improves your filing, so you have ample time to concentrate on other business-related matters.
At risk of making VAT returns late or incorrect to be penalized! Avoid all this and have smooth, compliant filing VAT Return in UAE by contacting our VAT expert today!