Filing Tax Returns and Refunds

For a VAT system to function effectively and achieve its intended objectives, the accurate preparation and timely filing of VAT returns by taxable persons is critical. The UAE VAT legislation imposes significant penalties for the late submission of VAT returns, as well as for filing incorrect or incomplete returns. As such, strict compliance with VAT laws and regulations is essential for all registered businesses.

In the UAE, all VAT returns must be submitted electronically through the Federal Tax Authority (FTA) portal by the taxable person or an authorized representative acting on their behalf.
Official FTA Portal: https://tax.gov.ae
Federal Tax Authority (FTA): https://tax.gov.ae/en/

Depending on the nature of transactions carried out during a tax period, taxable persons may file one of the following types of VAT returns:

• VAT Return with Tax Payable for the relevant tax period
• VAT Return with Tax Refundable by the FTA for the relevant tax period

Where VAT is refundable, the taxable person has the option to either carry forward the excess VAT to offset future tax liabilities or apply for a refund from the FTA. To claim a VAT refund, an additional VAT Refund Application must be completed and submitted online through the FTA portal.

Given the complexity of VAT regulations, VAT returns must be prepared with the utmost care and attention to detail. Particular consideration should be given to the following areas:

• Supplies subject to the Reverse Charge Mechanism must be correctly reported, even if they do not result in a direct tax payment.
• The value of supplies must be calculated strictly in accordance with UAE VAT law and executive regulations.
• Transactions involving non-monetary consideration (barter or in-kind supplies) are often overlooked, despite being subject to VAT reporting requirements.
• The FTA portal automatically captures the value of imported goods from UAE Customs. However, adjustments may be required where there are differences between the exchange rates applied by Customs and those prescribed by the FTA under VAT legislation. Such adjustments must be accurately reflected in the VAT return.

UAE Customs Authority: https://www.customs.gov.ae

Vaneesa Consultancy has a dedicated team of experienced tax consultants and accountants who work with clients across a wide range of industries and corporate structures. Our in-depth understanding of UAE VAT legislation enables us to manage the complexities of VAT accounting and VAT return preparation with precision, ensuring full compliance and minimizing tax risks for our clients.