The Federal Tax Authority (FTA) has set strict rules for every phase, from registration to payment for UAE VAT. Yet, many companies fail to track these dates properly.
Once you understand the VAT compliance timeline, it becomes easy to stay on track. In this guide, we will go through the key deadlines for VAT registration, return filing, payments, and penalties.
You can get personal assistance from our expert VAT agents in the UAE at Tax Gian.
- VAT Registration Timeline
Businesses in the UAE have to register for VAT if their taxable supplies and imports exceed AED 375,000 in the last 12 months or are expected to exceed this amount in the next 30 days.
If the threshold is reached, the company must apply for VAT registration within 30 days.
- Penalty for late registration:AED 10,000.
Non-UAE-resident businesses making taxable supplies must also register for VAT, regardless of their turnover, if no other party in the UAE is responsible for paying the tax.
If a business stops making taxable supplies or falls below AED 187,500, it must apply for VAT deregistration within 20 business days from the end of that month in which the condition applies.
- Penalty for late deregistration:AED 1,000 for the first month and AED 1,000 for every additional month, up to AED 10,000.
VAT registration and deregistration become easier with the assistance of VAT agents in Dubai.
- VAT Return Filing Timeline
The VAT return period for most businesses in the UAE is quarterly, covering every three calendar months. However, some large businesses may be required by the FTA to file returns monthly.
VAT returns must be submitted within 28 days after the end of the tax period.
For instance, if your VAT period finishes on March 31, the return should be filed by April 28.
If the deadline falls on a weekend or public holiday, the deadline shifts to the next working day.
Even if a company has no transactions during the tax period, it must still file a “nil return” by the same date.
- Penalty for late filing:AED 1,000 for the first delay, and AED 2,000 for each repeat delay within 24 months.
- VAT Payment Deadlines
Once the VAT return is submitted, any tax due must also be paid within 28 days after the end of the tax period.
If the payment is delayed, the FTA imposes percentage-based fines depending on how long the payment remains outstanding:
- 2%penalty immediately after the due date.
- 4% per monthon the unpaid tax amount starting one month after the due date.
- Reconsideration Requests
If a business disagrees with a decision or penalty imposed by the FTA, it can submit a reconsideration request.
The request must be filed within 20 business days from the date of receiving the penalty or decision. The FTA will review the application and release a response within 20 business days. A correct reconsideration application made with the help of expert VAT agents in Dubai always wins.
- Voluntary Disclosure and Error Corrections
Mistakes can happen during VAT filing, such as incorrect calculations or unreported invoices.
If a business identifies an error after submission, it must correct it through a voluntary disclosure.
If the error value is less than AED 10,000, the correction can be made in the next VAT return.
If it exceeds AED 10,000, a voluntary disclosure must be filed within 20 working days of discovering the mistake.
- Penalty for first-time voluntary disclosure:AED 1,000.
- Penalty for repeated offence:AED 2,000.
If the FTA discovers the error before the taxpayer discloses it, the penalties are higher; up to 50% of the unpaid tax, plus 4% monthly interest starting from the original due date.
- Common VAT Penalties and Fines
The FTA applies various penalties to ensure compliance. Below are the main ones:
Late penalty payment is 4% per month, up to 300% of the original fine. Businesses can avoid such nerve-wracking penalties by seeking assistance from expert VAT agents in the UAE whenever needed.
How can Tax Gian help?
VAT compliance in the UAE is all about timing. The FTA expects businesses to register, file, and pay taxes promptly. Missing a deadline, even by a few days, can result in financial losses and administrative hassle. However, all this can be avoided when businesses have experts like Tax Gian by their side. Register properly and file your VAT returns on time with the help of our experts.
