VAT Return Filing & Compliance

VAT Return filing is the official tax document which businesses submit to the Federal Tax Authority before the due date.  Businesses must submit these documents at certain times during the year depending on their tax period.  These documents must show all details of output tax due, and input tax recoverable along with other information required by the documents.  Either the taxed entity, or a person given authority by the taxed entity can file VAT.

The VAT Return Form can be found on the Federal Tax Authority’s official website.  It can be accessed by logging into the FTA e-services portal using the registered entity’s registered username and password.  The form must be completed by no later than the 28th day of the month following the tax period, or the date that the FTA mandates.  Tax payments should also be remitted by the same deadline.  Entities who are late in filing their VAT taxes will have a late penalty of AED 1,000 for the first occurrence.  The penalty amount increases if other tax payment and filing periods are missed.

The fields are pre populated and must be shown in Dirhams.  Additionally, tax amounts should be rounded off.


VAT Transaction Advising

The UAE and Saudi Arabia are implementing VAT under the unified VAT agreement for the Cooperation Council for Arab States of the Gulf.  Because VAT is levied on almost all tangible goods, and intangible services in existence, it impacts every business and every business function:  from cash flow to procurement and transactions.  Because VAT is a very complex and confusing field, businesses need consulting in regards to recording and filing it properly.  Already, more than 160 nations around the world use VAT as a way to generate revenue for state budgets.

Because a VAT is levied at each stage of the supply chain from the production and distribution stage to the final sale for the particular good or service, managers must understand such concepts as:  Supply, place of supply, and time of supply in order to properly implement VAT.  VAT transaction advising includes assistance in the following areas:  VAT registration, identifying the VATs that are and are not applicable for particular goods and services, the changes that VAT will bring to certain accounting practices, general information required to capture VAT for tax filing purposes, the invoices and other templates needed for filing VAT, along with the relevant information needed to do so.

Once VAT has been determined and filed appropriately, businesses need advising in order to ensure that they completely understand the process of recording and filing VAT.  They need consultants who can assist them in terms of repeated VAT filing and until their management is proficient in the entire process.

A good VAT transaction advisor works with corporate management to ensure that its clients are fully informed in terms of the latest changes in VAT laws.  Additionally, they need to work with the clients to ensure that VAT is filed according to the latest legislation.


VAT Audit Services

When businesses conduct a VAT audit, they analyze and examine their overall preparedness in terms of recording and filing VAT, complying with the latest VAT rules, and identifying any major deficiencies in the VAT environment or infrastructure – this includes transaction checking.  A good audit team is able to cross check if VAT has been properly accounted for and recorded in daily business transactions, and it can also check and verify if the information reported in the VAT returns is accurate, up-to-date, and relevant.

Businesses in the UAE need a good VAT audit team or consultancy service in light of the fact that a new law regarding VAT has just been passed in all GCC member states because this makes it easier for corporate management to identify, track, and record the company’s purchases and sales flow.  A good audit team or consultancy service will also verify that the information has been recorded correctly, and is relevant and up-to-date.  A good audit team or consultancy service also thoroughly evaluates corporate VAT transactions to ensure that they have been done in accordance with international VAT standards.  They also issue a report regarding the same.

All VAT audit services will comply with the rules and regulations stipulated by the Federal Tax Authority (FTA) in the form of a guidance note.  The issues to be addressed by the VAT audit team or consultancy service include:  document maintenance, tax collection, payment, input tax claim, etc…The audit team or consultancy service will also identify and rectify any instances of double payment of supplier invoices and double accounting on the part of corporate management.  In all, any company doing business in the UAE needs a comprehensive VAT audit team and strategy to ensure that all relevant tax accrued in the form of business purchases and sales are properly accounted for to avoid having penalties levied on the businesses.  The businesses can also save themselves the headache of being audited by the Federal Tax Authority.

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