7 Steps to Simplify Your VAT Tax Filing Process
Businesses must use the Federal Tax Authority (FTA) portal to upload their VAT tax filings.
The FTA portal is designed exclusively to accept online VAT filing formats, thus XML, EXCEL, or any other tool cannot be used to file VAT returns offline in the UAE. This implies that the taxpayer must manually enter the data for Sales, Purchase, Output VAT, Input, and Input VAT, among other categories, in order to file a VAT return via the FTA site.
How To File VAT Returns In UAE?
You must use the FTA portal, eservices.tax.gov.ae, to upload your UAE VAT tax return. Ensure you comply with all tax return criteria before submitting the VAT tax filing form on the site.
Steps of Filing VAT Returns In UAE
The taxpayer needs to complete the “VAT 201” form and submit it in order to complete filing the VAT return.
To view the VAT Return Form 201, the taxpayer needs to log into the FTA e-Services portal using their registered username and password. Choose ‘VAT’ -> VAT 201- VAT Return -> click on ‘VAT 201-New VAT Return’ from the Form Navigation menu to start filing a VAT return.
When the “VAT 201- New VAT Return” option is chosen, the VAT return form will be displayed in sections. Let’s discuss the procedures for submitting the VAT tax return in UAE as well as the information needed for each of the subsequent sections.
Also read: Step-by-Step Guide to VAT Registration Process for UAE Companies
1. Taxable Individual Credentials
Information such as the taxpayer’s name, residence, and “TRN,” or “Tax Registration Number,” will be recorded in this section. These particulars will automatically appear.
When a tax agent files the VAT return on the taxpayer’s authority, the information about the taxpayer, the tax agent, and the tax agency name, as well as the corresponding TAN (Tax Agency Number), are displayed at the top of the VAT return.
2. VAT Return Period
The VAT return period reference number, Tax Year end, VAT return due date, and VAT return time for which you are now filing the return are just a few of the details that will automatically appear.
Companies who must complete an annual input tax apportionment adjustment because they are unlikely to regain all of their input VAT should pay attention to tax year-end. Only the first return filed after the end of the tax year may make such an adjustment. The VAT return period reference number indicates the VAT return period that you will finish during that tax year.
If the VAT return period reference is 1, organizations impacted ought to submit their input tax apportionment annual adjustment in their VAT return. Companies don’t need to worry just yet because this will only apply after the first year of VAT returns, which is January 1, 2019.
3. VAT on Sales and All Other Outputs
This part requires you to provide information about standard-rate taxable supplies at the Emirates level, zero-rate supplies, exempt supplies, supplies subject to the reverse charge mechanism, etc.
4. VAT on Expenses and All Other Inputs
You must provide the specifics of acquisitions or expenditures that you have paid VAT on at a standard rate of 5% in this part. Additionally, you must provide the details of suppliers subject to reverse charge basis and entitled to recoverable input tax.
5. Net VAT Due
This section shows the VAT you owe at the time of your VAT return. Box No. 12 shows the Total Value of Due Tax for the period, which represents the entire amount of production tax owed for the Tax Period.
This will be computed using all other outputs, and the data declared in Sales. It is the total of the Sales and all other outputs’ columns for Adjustments and Output VAT.
Comparably, box 13 shows the total value of recoverable tax for the period and the total amount of input tax that can be claimed back during the tax period. This will be computed using the information provided in the VAT expenses section and all other inputs.
Box 14 shows the applicable tax for the period. The difference between the total amount of tax owed and the total amount of tax recoverable for the period will be this. The outcome will be net VAT paid or recoverable tax.
The difference between Box 12 and Box 13 amounts is the VAT you must pay. The net amount of recoverable tax may be refunded to you or carried over to the next VAT return period if the value in Box 12 is lesser than the sum in Box 13.
6. Additional Reporting Requirement
Only companies that have utilized and implemented the Profit Margin Scheme’s rules throughout this time are eligible for this section. If not, select “No” and move on to the following section. There is no economic effect on your VAT Return from this extra filing.
7. Declaration and Authorized Signatory
To submit the VAT Return, check the box near the declaration section in the preceding section and provide the information for the authorized signature. The taxpayer may also choose to draft the information and submit it later.
The taxpayer must double-check all the information before submitting the VAT return. They click the submit button only after they are confident that everything is accurate. A taxpayer will receive an email from FTA verifying the VAT return form submission following a successful VAT return filing in UAE.
Please read: Calculating VAT in Dubai: A Step-by-Step Guide
Final Words
Businesses can effortlessly produce a proper VAT Return with zero or minimal work using the appropriate tax accounting software. More crucially, this would avoid the heavy fines of AED 1,000 to 3,000 for inaccurate or non-filing VAT Returns.
Tax accounting software is crucial for determining a company’s effectiveness in ensuring regulation consistency. Companies must thoroughly assess the software that will facilitate a smooth transition to the new VAT regime and make accounting for VAT and filing returns easier.