As per the regulations introduced by the Federal Tax Authority, registered businesses in UAE have to keep records related to VAT for a minimum of five years or as long as what’s ordered by authorities. The tax authority can request a business that is registered for VAT in UAE to present VAT records at any time they suspect an issue to arise. The tax authority also has the discretion in requesting for other documents such as invoices issued, credit notes, invoices that are received by the entity, annual accounts details, general ledgers, and debit notes among others.

With the guidelines that have been issued by the FTA regarding VAT returns, a registered business that fails in keeping the records that are required of the authority, including other essential information that may be requested, will be fined Dhs10,000 for the first violation and Dhs 50,000 for repetition of the violation. In order for you to manage your business’ VAT obligations, it is advised to consult with a regulated tax agent in UAE.

Take note: if a business entity that is registered for VAT in UAE fails in submitting documents, records, and data that are related to taxation in the Arabic language and when the authority has requested for them, the business entity will have a penalty of approximately Dhs20,000.

What’s a VAT return?

The official document which is to be filed and completed by a business entity that is registered for VAT at regular intervals is referred to as the VAT return. The tax authorities in the country require registered businesses in UAE to detail all the input tax recoverable and output tax that is due, including all other details, in the VAT return.

A VAT return in UAE may be submitted by a taxable person or VAT registered business or another person that has been given the right in doing so on the behalf of the registered business e.g. accountant, legal representative, or tax agent.

What are the common requirements to complete a VAT return?

When completing the form for VAT return, the business registered for VAT in UAE has to do the following:

• • Provide all amounts in Dirhams (Dhs/AED), the currency of the United Arab Emirates
• • Provide all amounts to nearest fils (VAT return form allows for 2 decimal places
• • The furnishing of all details to complete the mandatory fields
• • Usage of ‘0” when it is necessary or when there's no amount that is to be declared

What is a final VAT return?

When a registered business in UAE decides to cancel the registration for VAT and the cancellation is approved by the FTA, the business will be notified regarding the deregistration or cancellation date. A final VAT return is required for a business that plans on cancelling VAT registration in UAE or undergoing UAE VAT deregistration. Here are some points to remember regarding final VAT returns:

• • A business in UAE is required in filing a final VAT return which applies to the last taxation period in which it will be registered for the purposes of VAT.
• • A tax period, as well as the submission date for a business’ final VAT return, would be given onto the registered business by the FTA.
• • A final VAT return of a business is required to be completed for a certain tax period. It should be filed with the tax authority according to the procedures and provisions followed with all other businesses for the filing of VAT returns. The business that will be deregistering for VAT should consider the filing of a final VAT return similar to any other VAT return filing in UAE.
• • With a final VAT return of a registered business for VAT in UAE, there is a need to account for and calculate the output tax for any products and/or services which are formed part of the assets of the business. This includes inventories and capital assets which have been held on hand by the business at the very last day of the business’ status of being registered for

VAT and for which the business has recovered input tax. A business is deemed to have provided the products and services even when they haven’t been provided to clients or customers.

VAT return filing service in UAE

Like many businesses in the country, because you are not familiar or experienced in complying with VAT regulations, most especially ones pertaining to VAT return filing in UAE, it is best to have the job given to experts like Farahat & Co. With the firm's team of regulated tax agents based across Dubai and the entire nation, you will have the guidance of professionals in the computation of VAT, processing of the VAT payments, as well as getting VAT refunds. Call us today to consult with our VAT specialists.