Shuraa Tax Blog

Category: Vat Return

  • How Startups in the UAE Can Simplify VAT Return Filing

    How Startups in the UAE Can Simplify VAT Return Filing

    Filing VAT Returns for Startups doesn’t have to be a complicated or stressful process. Yet, many new entrepreneurs in the UAE find themselves confused about compliance, deadlines, and documentation. If you’re running a young business, understanding VAT Returns for Startups in the UAE is essential to avoid penalties and maintain smooth financial operations.

    In this blog, we’ll walk you through the entire process of VAT Return Filing for Startups in the UAE, from understanding your eligibility to preparing accurate records and submitting them on time. We’ll also cover the most common mistakes startups make, practical tips to simplify the filing process, the VAT return filing for startups in the UAE, and the requirements you need to be aware of.

    Whether you are a small e-commerce business in Dubai, a tech startup in Abu Dhabi, or a growing enterprise in Sharjah, this guide will equip you with the knowledge to manage your VAT obligations easily and efficiently. By the end, you’ll feel more confident about handling your VAT returns and keeping your business fully compliant.

    What is VAT Return Filing in the UAE?

    VAT return filing in the UAE is the process where businesses registered for Value Added Tax (VAT) report their VAT-related transactions to the Federal Tax Authority (FTA) for a specific tax period.

    Here’s what it means in simple terms:

    What is Filed?

    Businesses must report:

    • Output VAT – VAT they charged customers on sales.
    • Input VAT – VAT they paid to suppliers on purchases.

    Purpose:

    To calculate whether the business owes VAT to the FTA (if output VAT > input VAT) or is eligible for a refund (if input VAT > output VAT).

    Who Needs to File:

    Any business registered for VAT in the UAE (i.e., with a Tax Registration Number – TRN) is required to file VAT returns.

    How Often:

    Most businesses file VAT returns quarterly (every three months), while some may be required to file monthly, depending on their annual turnover or FTA requirements.

    Where & How:

    Filing is done online via the FTA e-Services portal. Businesses must submit the VAT return (Form VAT201) and pay any due amount within the deadline (usually within 28 days after the end of the tax period).

    When to File VAT Returns in the UAE?

    In the UAE, businesses registered for VAT are required to file their VAT returns with the Federal Tax Authority (FTA) regularly, typically quarterly or monthly, depending on their turnover and the FTA’s allocation.

    Here’s a breakdown:

    1. Quarterly Filing (Most Common):

    • The majority of businesses file VAT returns every quarter (once every 3 months).
    • This is the default frequency assigned by the FTA unless monthly filing is specifically required.

    2. Monthly Filing (High-Turnover Businesses):

    • Businesses with an annual turnover exceeding AED 150 million are typically required to file VAT returns every month.
    • This helps the FTA track high-value transactions more closely.

    VAT Return Filing Deadlines 

    A VAT return must be filed within 28 days after the end of the tax period.

    For example:

    • If your tax period is Jan – Mar, your VAT return must be filed by April 28.
    • The payment for VAT liability must also be made by the same due date.

    VAT Registration Requirements for Startups in UAE

    When launching a new business, understanding the VAT return filing requirements for startups in the UAE is crucial. UAE’s VAT framework is designed to ensure that companies contribute fairly to the economy while benefiting from input tax recovery. For startups, getting this step right early on helps avoid penalties and ensures operations remain compliant.

    Understanding Taxable Supplies

    Startups first need to determine whether their activities fall under taxable supplies. This includes any sale of goods or services that are subject to the UAE VAT regime.

    If your startup is generating revenue from these taxable transactions, it becomes essential to assess whether you meet the criteria for VAT registration.

    VAT Registration Thresholds for Startups

    1. Mandatory Registration

    If your startup’s annual taxable turnover exceeds AED 375,000, you must register for VAT. This ensures that your business charges VAT correctly and files accurate VAT returns for startups.

    2. Voluntary Registration

    If your annual turnover falls between AED 187,500 and AED 375,000, you may choose to register voluntarily. While this is not compulsory, it allows you to reclaim VAT on business expenses, helping optimise cash flow and reduce operational costs from day one.

    Key Documents for VAT Registration

    Before you start VAT return filing for startups in the UAE, gather these documents to streamline the process:

    • Trade License: Proof that your startup is legally registered and authorised to operate in the UAE.
    • Owner/Partner IDs: Copies of passports or Emirates IDs of shareholders, partners, or directors.
    • Financial Records: Recent bank statements or financial statements to validate turnover figures.
    • Business Location Proof: A tenancy contract or utility bill that confirms the physical address of your operations.
    • Business Activity Details: A brief business plan or activity description outlining projected revenue and services offered.

    Why Early VAT Registration Matters

    Registering on time helps startups stay compliant with UAE VAT regulations and avoid late registration penalties. More importantly, it enables startups in the UAE to file VAT returns smoothly, making it easier to claim input tax credits and maintain financial transparency.

    Step-by-Step VAT Registration & Filing Guide for Startups in UAE

    For startups in Dubai and across the UAE, understanding and complying with Value Added Tax (VAT) requirements is crucial. VAT is a mandatory part of doing business and getting it right from the start will save you from compliance issues and penalties later. Below is a clear step-by-step guide to help you handle VAT registration and VAT return filing for startups in UAE smoothly.

    1. Registering for VAT Through the FTA Portal

    VAT registration is done entirely online through the Federal Tax Authority (FTA) portal, making it accessible and straightforward for startups.

    Step 1: Create Your FTA Account

    • Visit the FTA e-Services portal and click on “Sign Up.”
    • Please provide your email address and create a secure password to set up your account.
    • Confirm your email by clicking on the verification link sent by the FTA.

    Step 2: Complete the VAT Registration Form

    Once logged in, go to the “VAT Registration” (VAT101) section and fill out the form with:

    • Business details: legal name, activity type, and trade license information
    • Contact details: business address, phone, and email
    • Banking details: IBAN and bank information for transactions
    • Turnover details: expected annual revenue to assess eligibility

    Step 3: Upload Supporting Documents

    Prepare and upload scanned copies of:

    • Trade license
    • Passport copies of owners/partners
    • Financial statements or bank statements proving turnover
    • Lease agreement or utility bill confirming business address

    Step 4: Submit Application & Receive TRN

    After completing the form, submit your application. The FTA reviews the data and may request additional documents if necessary. Once approved, you will receive your Tax Registration Number (TRN) — your official VAT identity, which must be included on all future VAT invoices.

    2. Setting Up for VAT Return Filing

    Once you are registered, it’s time to prepare your systems for VAT return filing for startups in UAE:

    • Implement Accounting Software: Set up bookkeeping that tracks VAT on sales (output tax) and purchases (input tax).
    • Generate VAT-Compliant Invoices: Ensure every invoice includes the seller’s TRN, date of supply, description of goods/services, VAT rate (5%), and total VAT charged.

    3. Filing VAT Returns

    VAT Returns for Startups – What to Expect

    VAT returns must be filed either monthly or quarterly, depending on your business turnover. Your VAT return will include:

    • Total sales and output VAT collected
    • Total purchases and input VAT paid
    • Net VAT due to the FTA or a refund claim if input VAT is higher

    Filing Process

    1. Log in to the FTA portal.
    2. Select the VAT return period.
    3. Enter sales, purchase, and VAT amounts.
    4. Submit the return before the due date to avoid penalties.

    4. Meeting VAT Payment Obligations

    After submitting your VAT return, pay any outstanding VAT dues through your preferred payment channel (eDirham, bank transfer, etc.). Late payments attract penalties and interest, so it’s wise to pay early.

    5. Key VAT Compliance Requirements for Startups

    Here’s a quick checklist to stay on top of VAT return filing for startups in UAE requirements:

    • Charge 5% VAT on all taxable supplies (goods & services)
    • Issue VAT-compliant invoices for every sale
    • Maintain proper financial records for at least 5 years
    • File VAT returns on time — monthly or quarterly as per the FTA schedule
    • Pay VAT dues promptly to avoid fines

    Getting VAT right is critical for business credibility and compliance. For startups, having a streamlined process for VAT returns in the UAE ensures smooth operations and avoids penalties.

    By registering promptly, setting up accurate record-keeping systems, and filing returns on time, you stay fully compliant with UAE tax laws while focusing on growing your business.

    What is the VAT rate structure in UAE?

    The VAT rate structure in the UAE is simple and business-friendly, with three main categories. Most goods and services are subject to the standard 5% VAT, which applies to retail sales, restaurants, hospitality, and imports.

    Certain supplies are zero-rated, meaning they are exempt from tax. However, businesses can still claim input VAT, which includes exports, international transport, specific healthcare and education services, and some precious metals.

    There are also VAT-exempt supplies, where no VAT is charged and input VAT cannot usually be recovered, such as local passenger transport, certain financial services, residential property (in specific cases), and bare land.

    Advantages of Registering for VAT as a Startup

    Here’s a straightforward overview of the advantages of registering for VAT as a startup:

    1. Legal Compliance

    Registering for VAT ensures your startup is fully compliant with local tax laws. In jurisdictions like the UAE, businesses that exceed the mandatory threshold must register for VAT to avoid fines or penalties.

    2. Business Credibility

    A VAT registration number adds credibility to your startup. Suppliers, partners, and clients often view VAT-registered businesses as more established and trustworthy.

    3. Input VAT Recovery

    VAT-registered startups can reclaim the VAT paid on business expenses (input VAT), thereby reducing their overall costs. This can include purchases like office supplies, software subscriptions, or equipment.

    4. Facilitates Business Growth

    Being VAT-compliant makes your business more attractive to larger clients and corporations who prefer to deal with VAT-registered vendors. It also positions your startup for smooth expansion in domestic and international markets.

    5. Transparency and Record-Keeping

    VAT registration requires systematic accounting of sales and purchases. This encourages better financial management, improves transparency, and simplifies audits.

    6. Avoids Future Tax Liabilities

    Early VAT registration can prevent the accumulation of unpaid VAT liabilities. Staying compliant from the beginning ensures your startup avoids backdated penalties.

    7. Enhances Competitive Edge

    Some customers may prefer working with VAT-registered suppliers to claim back VAT themselves. Registering early can make your startup a preferred choice in B2B transactions.

    Common VAT Mistakes Startups Should Avoid

    Here’s a list of common VAT mistakes startups should avoid:

    1. Not Registering on Time

    Many startups delay VAT registration, thinking they’re under the threshold or that it’s optional. Late registration can lead to penalties, interest on unpaid VAT, and compliance issues.

    2. Incorrectly Calculating VAT

    Misunderstanding the difference between standard-rated, zero-rated, and exempt supplies can result in charging the incorrect VAT rate to clients. This mistake can trigger audits and fines.

    3. Poor Record-Keeping

    Failing to maintain proper invoices, receipts, and VAT records can make filing VAT returns difficult and risky. Proper bookkeeping is crucial for audits and input VAT recovery.

    4. Claiming VAT Incorrectly

    Startups sometimes claim VAT on personal or non-business expenses. Only VAT on legitimate business purchases can be reclaimed. Improper claims can result in penalties.

    5. Mixing VAT-Exempt and VATable Supplies

    Startups offering both VATable and exempt products/services may misallocate VAT, leading to incorrect filings. Precise categorisation is essential.

    6. Late or Inaccurate VAT Returns

    Submitting VAT returns late or with errors can attract fines. Staying on top of deadlines and double-checking numbers is critical.

    7. Ignoring Cross-Border Transactions

    Startups selling internationally may overlook VAT rules for imports, exports, or e-services. Mismanaging these can create unexpected tax liabilities.

    8. Not Seeking Professional Help

    Trying to handle VAT without guidance can be risky. Consulting a VAT expert ensures compliance, particularly in countries like the UAE, where regulations can be complex.

    Streamline Your VAT Returns with Shuraa Tax!

    Simplifying VAT return filing doesn’t have to be a daunting task for new businesses. By understanding the essentials of VAT Returns for Startups, keeping accurate records, meeting deadlines, and knowing the VAT return filing for startups in UAE requirements, entrepreneurs can maintain compliance while focusing on growth.

    Registering early, using proper accounting systems, and avoiding common pitfalls will not only protect your startup from penalties but also enhance credibility and financial transparency.

    For startups seeking expert guidance, Shuraa Tax offers professional support to make VAT Returns for Startups in UAE seamless and stress-free. Get in touch today to ensure your VAT compliance is accurate and timely:

    Call: +(971) 44081900
    WhatsApp: +(971) 508912062
    Email: info@shuraatax.com

    With the right knowledge and support, managing VAT Return Filing for Startups in the UAE can become a smooth, efficient part of running your business.

  • Essential Documents Required for VAT Return Filing in UAE 

    Essential Documents Required for VAT Return Filing in UAE 

    Filing VAT returns is a mandatory step for businesses in the UAE to stay compliant with the Federal Tax Authority (FTA). This process requires businesses to submit VAT returns quarterly or monthly, depending on their taxable supplies.

    In this guide, we’ll explore the essential documents required for VAT return filing in UAE, helping you avoid penalties and ensure smooth compliance.

    What is VAT Return in UAE?

    In the UAE, a VAT return is a mandatory filing for businesses registered under the Value Added Tax (VAT) system. It serves as a formal statement to the Federal Tax Authority (FTA), detailing the VAT collected on sales (output VAT) and the VAT paid on purchases (input VAT) during a specific tax period.

    The filing frequency can be quarterly or monthly, depending on the business size and type. A VAT return includes information on total sales, purchases, and any adjustments from previous periods. If the VAT collected on sales exceeds the VAT paid on purchases, the business must pay the difference to the government.

    Conversely, if the VAT paid on purchases increases, the business may claim a refund or carry the amount forward. VAT returns must be filed online via the FTA portal within 28 days of the tax period’s end.

    VAT Return Filing Requirements in the UAE

    To ensure compliance with UAE VAT laws, businesses must adhere to specific requirements when filing VAT returns. Understanding the critical aspects of this process is essential for accurate and timely submissions. Here’s an overview of the core elements involved:

    Tax Periods

    The Federal Tax Authority (FTA) determines the frequency of VAT returns based on a business’s taxable supplies over the preceding twelve months. Businesses with taxable supplies exceeding AED 150 million must file their VAT returns monthly.

    Those with supplies between AED 37.5 million and AED 150 million file returns quarterly, while businesses with taxable supplies below AED 37.5 million can file biannually.

    Due Dates

    VAT returns are typically due by the 28th day of the month following the end of the tax period. However, businesses registered as part of a Tax Group enjoy an additional 15-day grace period.

    It allows them to file by the 15th day of the following month. Adhering to these deadlines is critical, as late submissions may incur penalties.

    Filing Methods

    Businesses can file VAT returns electronically via the FTA’s official portal (EmTax). Alternatively, companies may engage a Tax Agent to manage the filing process.

    These agents are authorised professionals who ensure compliance with VAT regulations, providing peace of mind for businesses with more complex tax requirements.

    By understanding these requirements—tax periods, deadlines, and filing methods—businesses can direct VAT return filing in the UAE more effectively and avoid potential fines or compliance issues.

    Documents Required for VAT Return Filing in UAE

    To file your VAT return successfully in the UAE, certain documents required for VAT return filing in UAE must be prepared in advance.

    Trade License: A valid trade License is a must for any business operating in the UAE. It serves as your legal foundation for VAT registration and future filings.

    Tax Registration Certificate (TRC): Issued by the FTA upon registration, your TRC includes your VAT registration number, necessary for filing VAT returns.

    Tax Invoices: Every transaction should be supported by accurate tax invoices containing essential details such as supplier and recipient information, VAT amounts, and descriptions of goods or services.

    Purchase Invoices: Document VAT paid on purchases to claim input VAT credits.

    Financial Reports and Bank Statements: Clear financial records help ensure accurate VAT calculations and compliance.

    Import and Export Declarations: Required if your business engages in international trade to validate VAT payments and claim zero-rating.

    Credit Notes and Debit Notes

    Credit and debit notes adjust previously issued invoices due to errors, returns, or cancellations. Proper documentation and justification of these notes are essential for maintaining correct VAT records.

    Records of Reverse Charge Mechanism

    For industries where the reverse charge mechanism applies, the recipient, rather than the supplier, is responsible for paying VAT. Maintaining accurate records of these transactions is crucial for VAT return filing.

    Audited Financial Reports

    If your business is subject to external audits, you may need to provide audited financial reports when filing VAT returns. These reports should be prepared thoroughly to avoid penalties from the FTA.

    Additional Requirements

    In some cases, businesses may also need to submit specific details such as:

    Profit Margin Scheme: Provide the required documentation if your business is part of this scheme.

    Goods Transferred to GCC States: Any transfer of goods to other GCC countries must be reported.

    VAT Paid on Personal Imports: Personal imports subject to VAT should be recorded.

    Transportation of Goods: Details on transportation of goods to other GCC countries need to be documented.

    Key Points for VAT Return Filing

    Here are some essential tips to remember:

    • All amounts should be reported in UAE Dirhams (AED).
    • Round off all amounts to the nearest fields.
    • VAT returns must be submitted to the FTA by the 28th day following the end of the tax period. If this falls on a weekend or public holiday, the deadline extends to the next business day.

    Failure to submit VAT returns on time can result in penalties. For instance, an initial fine of AED 1,000 may apply, with a further fine of AED 2,000 for repeat offences within 24 months.

    How Shuraa Tax Can Help You with VAT Return Filing

    Navigating VAT return filing in the UAE can be challenging, especially when it comes to ensuring that all documents required for VAT return filing in UAE are prepared correctly. Shuraa Tax provides expert services to help you meet compliance standards, submit accurate VAT returns, and avoid costly penalties.

    Contact us today at +971508912062 or info@shuraatax.com to learn how we can assist with your VAT return filing. By staying organised and compliant, you can focus on running your business while we handle your tax obligations efficiently.

    Related guides:

  • VAT Refund Dubai for Tourists

    VAT Refund Dubai for Tourists

    Value Added Tax (VAT) is a consumption tax that is added to the cost of goods and services at each stage of production. While VAT is a common tax in many countries, tourists visiting Dubai will be pleased to know that they can actually get a refund on the VAT they pay on certain purchases.

    VAT refund in Dubai for tourist allows you to enjoy shopping in Dubai without having to worry about paying extra taxes. The VAT refund system in Dubai is designed to make shopping more enjoyable for tourists, and it provides a great incentive for visitors to shop and spend money in the city.

    So, if you’re too planning a visit and shopping in Dubai, explore the benefits of the tourist VAT refund in Dubai and understand how tourists can take advantage of this great opportunity.

    VAT in Dubai

    VAT stands for Value Added Tax. It’s an indirect tax levied on most goods and services at each stage of the supply chain. Businesses registered for VAT collect VAT from customers and then remit it to the government, minus the VAT they paid on their own business purchases (input VAT).

    This ensures the final consumer bears the burden of the tax.

    The standard VAT rate in the UAE is 5%. This applies to most goods and services.

    However, there are also two other categories:

    Zero-rated supplies: These have a 0% VAT rate. This applies to exports outside the GCC (Gulf Cooperation Council) countries, international transportation, some specific areas like healthcare and education, and the first supply of residential property within 3 years of completion.

    Exempt supplies: These are not subject to VAT at all.

    Tourist VAT Refund Scheme in UAE

    The VAT Refund Scheme in the UAE for Tourists is a program that allows visitors to claim back a portion of the Value Added Tax (VAT) they paid on eligible purchases made during their trip.  Basically, it’s a way for tourists to get some money back on the taxes they paid for goods.

    When you buy something in the UAE, there’s usually a 5% VAT added to the price.  This scheme lets you get some of that VAT back when you leave the country. This program is exclusive for tourists visiting the UAE, not residents or crew members departing.

    However, it’s not a full refund, you can get back 85% of the VAT you paid, minus a small service fee.

    Who is Eligible for VAT Refunds?

    Here are some general requirements to be eligible for VAT refunds in Dubai for tourist:

    • You must be a tourist visiting the UAE, not a resident or a crew member departing the country.
    • You must be 18 years old or older.
    • Your purchases need to be at least AED 250 (around $68 USD) per individual tax invoice (receipt) from a store participating in the VAT Refund Scheme.

    The scheme applies to most goods, but with some exceptions. Here’s what qualifies:

    • Goods that are unopened, unused, and in their original packaging.
    • Most store-bought items (electronics, clothing, etc.)

    Not Eligible:

    • Food and Beverages are generally not included in the scheme.
    • The program applies to goods, not services like restaurant bills or salon services.
    • Certain goods like basic necessities (fresh food) and local residential rents are already VAT-exempt and not eligible for further refunds.

    Please note you have 90 days from the purchase date to validate your Tax Refund Slip at the airport upon departure. You can claim your refund within one year from validating the Tax Refund Slip.

    The VAT Refund Process in Dubai for Tourists

    Here’s a step-by-step guide on claiming VAT refund in Dubai for tourist:

    1. Look for Participating Retailers

    Keep an eye out for stores displaying the “Tax-Free” or “Premier Tax Free” logo. These shops are part of the VAT refund program.

    2. Request a Tax Refund Slip

    When making a purchase above AED 250, ask the cashier for a Tax Refund Slip. This slip details your purchase and the VAT amount you paid.

    3. Validate Your Tax Refund Slip

    At departure from the UAE, head to a planet tax-free kiosk or manned desk at the airport before checking in your luggage and clearing security. You’ll need:

    • Your Passport
    • The Tax Refund Slip(s)
    • The Purchased Items (which may be inspected by customs)

    4. Receive your Refund

    You can get 85% of the VAT amount back, minus an AED 4.80 service charge per Tax-Free Tag. You can choose a cash refund (AED 35,000 maximum) or a credit card refund.

    5. Time Limits

    You have 90 days from the purchase date to validate your Tax Refund Slip at the airport, and one year from validation to claim your refund.

    VAT Refund at Dubai Airport Requirements

    Here are the VAT Refund requirements at Dubai Airport (and all UAE airports) for Tourists:

    • The original passport used for entry into the UAE.
    • The original Tax Refund Slips issued by participating stores for your eligible purchases. Ensure they’re complete and accurate.
    • You must have the original purchased items with you in their unopened, unused, and original packaging. Customs officials may request to inspect them.
    • You have 90 days from the purchase date to validate your Tax Refund Slips at the airport before departure.
    • Pack your purchases carefully to avoid any damage during travel that might affect the refund process.

    Locations to Recover VAT in UAE for Tourists

    These are the most common locations for VAT recovery. All major airports in the UAE have designated VAT refund points, including:

    • Dubai International Airport (all terminals have VAT refund points)
    • Abu Dhabi International Airport
    • Sharjah International Airport
    • Al Maktoum International Airport (Dubai World Central)
    • Al Ain International Airport
    • Ras Al Khaimah International Airport

    VAT refunds can also be claimed at some seaports in the UAE, but this is less common than airports.

    Read more: How to Claim VAT Refund in UAE 2026?

    Shuraa Tax Simplifies Your Dubai Experience

    Claiming a VAT refund in Dubai is a great way for tourists to save money on their purchases and make the most of their trip. By taking advantage of this opportunity, visitors can enjoy shopping in Dubai without having to worry about paying extra for taxes. The process is simple and straightforward, and the benefits are definitely worth it.

    Keep your receipts safe, ensure your purchases are unopened and in original packaging, and factor in the time needed for validation at the airport.

    If you need assistance with VAT refunds or any other business taxation needs in the UAE, don’t hesitate to consult Shuraa Tax. Our team of highly experienced tax consultants can ensure you maximize your benefits and minimize any tax burdens.

    So, relax, enjoy the sights and sounds of Dubai, and leave the tax complexities to us.

    Get in today at +971508912062. You can also drop us an email at info@shuraatax.com.

  • VAT Returns in UAE: Simplified Guide for Businesses

    VAT Returns in UAE: Simplified Guide for Businesses

    The implementation of the Value Added Tax (VAT) system in the United Arab Emirates (UAE) has made it essential for businesses to accurately file VAT returns in UAE and comply with tax regulations. A VAT return in UAE is a formal declaration of a company’s taxable sales and purchases within a specific period. Ensuring timely VAT return filing in UAE helps businesses maintain compliance and avoid penalties.

    All taxable businesses must submit UAE VAT returns by the deadline, typically the 28th of the month following the relevant tax period. Failure to do so may result in fines or legal consequences. Understanding the UAE VAT return format is crucial, as it ensures accurate VAT reporting on sales, purchases, and other taxable transactions.

    This guide provides a step-by-step approach to VAT return filing in UAE, covering the VAT return form, submission procedure, and key considerations for businesses to meet their tax obligations efficiently.

    What is a VAT return in UAE?

    A VAT return in UAE is an official document that VAT-registered businesses must submit to the Federal Tax Authority (FTA), reporting the VAT collected on taxable supplies and the VAT paid on expenses. This process, known as VAT return filing in UAE, helps businesses calculate their net VAT payable or refundable.

    VAT returns UAE typically follow a quarterly or monthly filing schedule, depending on the business’s tax registration details. Timely submission of UAE VAT return is crucial to avoid penalties and ensure compliance with UAE tax laws. The VAT return form includes total sales, purchases, output VAT, input VAT, and the final VAT amount payable or reclaimable.

    What is a VAT Return Form?

    The Form VAT 201 in the UAE is broadly categorised into seven sections, each serving a specific purpose in reporting taxable sales and purchases. These sections are:

    1. Tax Period: It will be auto captured.
    2. Output VAT: This section reports the VAT collected on taxable sales. Businesses must provide the total value of standard-rated sales, zero-rated sales, and exempt sales, along with the corresponding VAT amounts. It is obligatory to mention local taxable sales emirates-wise and corresponding VAT.
    3. Input VAT: Businesses report the VAT paid on eligible business purchases. This includes input VAT on goods and services acquired for business purposes, which can be offset against the output VAT liability.
    4. Adjustments: If any adjustments need to be made to previously reported amounts, harmful debt adjustments, or adjustments in the capital scheme. This section allows businesses to provide details and explanations for such changes.
    5. Import details: Descriptions 3, 6 and 7 mention imports of goods and services and adjustments. Details of imports linked with TRN will auto-populate.
    6. Total VAT Due and Refunds: Businesses calculate the net VAT liability or the refundable amount by subtracting the input VAT from the output VAT. This section displays the total VAT due or the refundable VAT, if applicable.
    7. Profit margins: The business needs to mention if the profit margin scheme is applied for the reportable tax period.
    8. Declaration and Signature: The final section requires the authorised person to declare the accuracy of the information provided and affix their signature, acknowledging their responsibility for the contents of the VAT return.

    By organising the VAT returns in UAE into these distinct sections, Form VAT 201 streamlines the reporting process, ensuring that businesses can accurately report their taxable sales and purchases in a structured manner.

    Who must file a VAT return in UAE?

    Businesses registered under VAT in the UAE must comply with VAT return filing in UAE regulations. The UAE VAT return must be filed by taxable businesses and individuals whose taxable supplies and imports exceed the mandatory registration threshold of AED 375,000. Additionally, voluntary registration is allowed for businesses with taxable supplies exceeding AED 187,500.

    The VAT return in UAE is typically filed every quarter, though some businesses may be required to file monthly. The Federal Tax Authority (FTA) mandates that companies submit their VAT returns UAE through the FTA portal, ensuring accurate reporting of output VAT (collected from customers) and input VAT (paid on purchases).

    Failure to meet the VAT return deadlines can result in penalties, making it crucial for businesses to comply with UAE tax regulations.

    Key Filing Dates for VAT Returns in the UAE

    The key filing dates for VAT returns in the UAE are as follows:

    1. Monthly and Quarterly Deadlines: For both monthly and quarterly VAT returns in the UAE, the deadline for filing is set as the 28th day of the month following the end of the VAT return period. For example, if you are filing a quarterly VAT return for the period from February to April, the deadline for filing this return would be the 28th of May. In the case of public holidays or weekends on the 28th day, then deadlines will be extended to the following working day.
    2. First Tax Period: The first tax period can vary for each business based on individual instructions received from the Federal Tax Authority (FTA). For instance, if your first tax period is from January 1 to January 31, you must file your VAT return for this period on or before February 28/29. If your first tax period is Jan- Mar 23, then VAT return will be due by 28th April (or the next business day if February 28 falls on a public holiday or weekend).
    3. Extended Tax Period: In some cases, the first tax period for a business may span more than three months. For example, if your first tax period is from January 1, 2018, to April 30, 2018, you must file your VAT return on or before May 28, 2018 (If May 28 falls on a public holiday or a weekend, the deadline for filing the VAT returns in the UAE, whether it is monthly or quarterly, is extended to the next business day).

    Businesses must adhere to these essential filing dates to ensure the timely submission of VAT returns and avoid any penalties or non-compliance issues.

    Details Required to File VAT 201 Return Form

    To file a VAT 201 Return Form in the UAE, you need the following details:

    Taxable Person Details

    Sales and Output Tax

    • Standard Rated Sales (5%): Domestic sales subject to VAT
    • Zero-rated Supplies: Exports, education, healthcare, etc.
    • Exempt Supplies: Certain financial services, residential properties, etc.
    • Reverse Charge Transactions: Imported goods/services where the buyer pays VAT
    • Adjustments (if any): Discounts, bad debts, etc.

    Purchases and Input Tax

    • Standard Rated Purchases (5%)
    • Reverse Charge Mechanism Purchases
    • Imports from GCC & Non-GCC countries
    • Recoverable Input Tax (VAT paid on expenses that can be claimed)

    VAT Payable or Refundable Calculation

    • Total Output VAT (VAT collected from customers)
    • Total Input VAT (VAT paid on purchases)
    • Net VAT Payable or Refundable (Output VAT – Input VAT)

    Additional Information (if applicable)

    • Any voluntary disclosures for corrections from previous returns
    • Tax Credit Notes for returned goods or services
    • Penalties or Adjustments applied by the FTA

    Payment Details

    • Amount to be paid to the FTA (if VAT payable)
    • Bank details for refund (if VAT refundable)

    Overview of Sections in the VAT Return Form: Pre-Populated Data and Taxpayer Details

    • Main Section: Pre-Populated Data The main section of the VAT Return Form contains pre-populated details specific to your business. This includes information such as the form type, Address, Contact number, and submission date. The details are automatically filled in based on your data, ensuring accuracy and efficiency in the filing process.
    • Taxable Person Details Section: The Taxable Person Details section captures essential information about your business. It includes your Tax Registration Number (TRN), the Company’s name in both English and Arabic, the registered address or place of residence of your business, the name of the tax agency, the Tax Account Number (TAN), the name of the tax agent, and the Tax Agent Approval Number (TAAN). These details are also pre-populated based on the information provided during registration.
    • VAT Return Period Section: The VAT Return Period section displays essential details related to the tax year and the specific VAT returns in UAE period, whether monthly or quarterly. It also includes the VAT return period reference number, which allows you to make adjustments and recover tax at the end of the tax year based on any necessary corrections made throughout the year.

    Step-by-Step Guide to Filing VAT Return in UAE Using Form VAT 201

    Below are the steps to file VAT return in UAE using form VAT 201

    Step 1: Accessing the VAT Return Form 201 on the FTA e-Services Portal

    To start the VAT return filing in UAE, follow these steps:

    • Log in to the FTA EmaraTax e-Services portal using your registered username and password.
    • Go to the Form Navigation menu and select your company name.
    • Click on ‘VAT’ from the menu on the left.
    • Select ‘My Filings’ and then ‘View All’.
    • Find the unfiled return (it will not have a VAT reference) and click ‘File’ under the action column.
    • Click ‘VAT 201 – New VAT Return’ to begin.
    • Tick the confirmation box to indicate you have read the instructions.
    • Click ‘Start’ to proceed.

    Step 2: Taxable Person Details

    • This section auto-fills the taxpayer’s TRN (Tax Registration Number), name, and address.
    • If a tax agent is filing on behalf of the taxpayer, their details can be added.

    Step 3: VAT Return Period

    • This section automatically includes details such as:
    • VAT return period (e.g., monthly or quarterly).
    • Tax year-end.
    • Reference number and VAT return due date.

    Step 4: Reporting VAT on Sales and Other Outputs

    This section captures VAT on all sales and supplies made during the VAT filing period in UAE.

    • The information is displayed in a table format:
    • Total Transaction Amount (AED) – Total invoice value, including any adjustments.
    • VAT Amount Collected (AED) – VAT collected from sales.
    • Adjustments (AED) – Any changes in VAT due to credit notes or corrections.
    • You must also provide details of taxable supplies in each Emirate, including:
    • Standard-rated supplies
    • Zero-rated and exempt supplies
    • Reverse charge mechanism supplies

    Step 5: VAT on Expenses and All Other Inputs

    This section captures purchases and expenses where VAT is paid.

    • Details include:
    • Total Purchase Amount (AED) – From purchase invoices, including adjustments.
    • Recoverable VAT Amount (AED) – VAT you can claim as a refund.
    • Adjustments (AED) – Modifications to input tax from earlier periods.

    Step 6: Net VAT Due

    This section calculates how much VAT you owe or can reclaim.

    • Box 12: Total VAT due for the period (from the sales and outputs section).
    • Box 13: Total VAT recoverable (from expenses and inputs section).
    • Box 14: Net VAT payable or refundable.
    • If Box 12 > Box 13, you need to pay VAT.
    • If Box 12 < Box 13, you can request a refund or carry the balance to the next VAT filing period in UAE.

    Step 7: Additional Reporting Requirement

    • If your business used the Profit Margin Scheme, report it here.
    • If not, select ‘No’ and move to the next section.

    Step 8: Declaration and Authorized Signatory

    • Enter the authorised signatory’s details.
    • Tick the declaration box to confirm accuracy.
    • You can save it as a draft or submit the VAT return.
    • Once submitted, the FTA will send a confirmation email.

    By following this step-by-step VAT return filing in UAE guide, businesses can ensure compliance with UAE VAT laws and submit their UAE VAT return efficiently.

    Documents required for VAT Return filing in the UAE

    For VAT return filing in the UAE, businesses must prepare and submit specific documents to ensure compliance with the Federal Tax Authority (FTA). The key documents required include:

    Tax Invoices and Credit Notes

    • Sales invoices issued to customers
    • Purchase invoices received from suppliers
    • Credit notes for returned goods or discounts

    VAT Return Form (Form 201)

    • Completed VAT return form available on the FTA portal

    VAT Ledger and Reports

    • Output VAT report (VAT collected on sales)
    • Input VAT report (VAT paid on purchases)
    • Summary of taxable and exempt supplies

    Bank Statements

    • Proof of VAT payments and receipts

    Import and Export Documents

    • Customs declarations
    • Import VAT statements from the FTA (if applicable)

    Financial Statements (Optional but Recommended)

    • Profit and loss statement
    • Balance sheet

    Penalties Associated with VAT Returns in UAE

    The Federal Tax Authority (FTA) in the UAE imposes penalties for non-compliance with Value Added Tax (VAT) return regulations. These penalties apply to businesses that fail to meet VAT obligations, including late filings, incorrect submissions, and tax evasion. Below are the key penalties associated with VAT returns in the UAE:

    Late VAT Return Filing

    • AED 1,000 for the first offence.
    • AED 2,000 for subsequent offences within 24 months.

    Late VAT Payment

    • 2% of the unpaid tax is charged immediately after the due date.
    • 4% per month is charged on the outstanding amount if unpaid within a month.

    Incorrect VAT Return Submission

    • AED 3,000 for the first offence.
    • AED 5,000 for repeated offences.

    Failure to Maintain Records

    • AED 10,000 for the first offence.
    • AED 20,000 for subsequent offences.

    Failure to Voluntarily Disclose Errors

    • 5% to 50% of the unpaid tax (depending on when the error is disclosed).

    Incorrect Tax Invoice Issuance

    • AED 5,000 per incorrect invoice issued.

    Failure to Register for VAT (if required)

    • AED 10,000 penalty for failing to register.

    Failure to De-Register for VAT (if required)

    • AED 1,000 penalty, increasing by AED 1,000 per month, up to AED 10,000.

    VAT compliance is crucial for businesses in the UAE. Ensuring timely filing, accurate records, and proper tax invoices can help avoid hefty penalties. If you need VAT assistance, Shuraa Tax can help with VAT registration, filing, and compliance.

    VAT Return Filing in Dubai, UAE

    Filing a VAT return in UAE is a detailed and intricate process that requires careful attention. It is crucial for businesses to seek expert advice before submitting their VAT return to avoid potential errors that may result in substantial fines and penalties imposed by the Federal Tax Authority (FTA).

    Shuraa Tax is a reputable audit and accounting company based in Dubai, offering reliable VAT Return Filing Services that comply with FTA regulations. Contact Shuraa Tax Consultants right immediately to file a VAT return in Dubai! All you need to do is contact us at info@shuraatax.com or +971 508912062.

    FAQs

    Q1. What is the due date to submit VAT return in UAE?

    The 28th of the month following the end of the tax period.

    Q2. What will be the consequence of not filing the VAT return?

    Penalties, fines, and possible restrictions on business operations.

    Q3. If I don’t have any sales and purchases during the tax period, what should I do?

    Submit a nil VAT return to avoid penalties.

    Q4. Who is liable for monthly and quarterly returns submission?

    Businesses assigned a monthly or quarterly tax period by the FTA based on turnover.

    Q5. What is an advantage for a company to register for VAT?

    Legitimacy, input VAT recovery, and compliance with UAE tax laws.

    Q6. When are VAT returns due?

    By the 28th of the following month after the tax period ends.

    Q7. How to file a VAT return?

    Log in to the FTA portal, complete the VAT201 form, and submit it online.

    Q8. What information is required to file a VAT return?

    Sales, purchases, VAT collected, VAT paid, and any adjustments.

    Q9. How to calculate VAT liability?

    VAT liability = Output VAT (collected) – Input VAT (paid).