VAT return filing involves submitting periodic reports to the tax authorities detailing the VAT collected on sales and the VAT paid on purchases. Businesses must file VAT returns, usually on a quarterly or annual basis, depending on their size and the jurisdiction’s regulations. The return includes calculations of output VAT (collected from customers) and input VAT (paid on business expenses), determining the net VAT liability or refund due. Accurate record-keeping is crucial for VAT returns, ensuring that all taxable transactions, zero-rated supplies, and exempt supplies are correctly reported. The timely and precise filing of VAT returns is essential to comply with tax laws and avoid penalties.

Filing VAT returns in the UAE involves several key steps:

1. Submit Required Documents: Gather and prepare all necessary documentation, including invoices, receipts, and records of sales and purchases.
2. Document Review: Examine the submitted documents to ensure all information is accurate and complete.
3. Identify Discrepancies: Check for any inconsistencies or errors in the VAT calculations and rectify them.
4. Make Corrections: Address any identified issues by making the necessary corrections to the VAT return.
5. File the Return: Complete and submit the VAT return through the Federal Tax Authority’s online portal.
6. Conduct Follow-ups: Regularly check for any updates or notices from the tax authority and ensure ongoing compliance.
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DUE DATE FOR VAT FILING –

In the UAE, the VAT filing due dates are as follows:

• Small Businesses: Typically file VAT returns quarterly.(Small businesses in the UAE are those whose taxable turnover is below AED 1 million per annum.)
• Large Businesses: Usually file VAT returns monthly.(Large businesses are those with a taxable turnover exceeding AED 1 million per annum)

The exact due dates for filing are specified by the Federal Tax Authority (FTA) and are generally within 28 days after the end of each tax period.

Consequences for Delayed Submission and Payment of VAT Returns in the UAE– 

Late Submission of VAT Returns:

• First Instance: AED 1,000
• Subsequent Instances: AED 2,000

Late Payment of VAT:

If VAT remains unpaid the day after the deadline, a 2% penalty is immediately charged. Following that, an additional 4% penalty is applied monthly until the tax is settled. Should the tax remain unpaid for over a month beyond the payment deadline, the penalty can escalate up to 300% of the outstanding amount.