VAT Return Filing Guide for Startups | FlyingColour
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VAT Return Filing Guide for Startups


Introduction to VAT:

VAT was introduced into the UAE on the first January 2018 and all businesses that sells products or services and exceed a pre-determined annual turnover threshold required to charge an additional 5% as a VAT to any or all the consumers. All mainland as well as free zone businesses that exceed turnover of AED 375,000 ought to register for VAT. All VAT transactions are going to be needed by law to be rigorously recorded and sporadically submitted to the FTA in the form of VAT return. This is how the Government can gauge the VAT you received, versus how much you have paid. Any difference is payable / refundable to and / or from the Government on a quarterly or monthly basis or as per the tax period mentioned in tax registration certificate. This post will provide guidance to the startups about their VAT return filing process with FTA.

What if i don’t register for VAT

VAT compliance within the UAE has become necessary if your business has exceed the mandatory threshold. If this is the case and you are not registered for VAT, you may be risking a high penalty from the FTA. If company registered with FTA but failed to file the VAT returns within the 28 days time frame of subsequent tax period, you will be risking penalties of AED 1,000 for first time offenders and will increased, if failed to filed on time.

How to file vat return in UAE?

All registered businesses are equally liable for filing a VAT return electronically through the FTA portal at the end of every month or quarter counting on their size depending on the filing period set by FTA
You have 28 days past your tax amount finish date to file your VAT, therefore if your quarter finishes on May 31st, you’ve time till June 28th to file.
An individual or business doesn’t have to be compelled to complete their VAT filing themselves; they will additionally authorize a representative to file on their behalf through an authorized VAT businessperson. By utilizing an authorized firm a business will guarantee their VAT is submitted on time and no errors would be made. Clean accounts is very helpful for error free vat rerun filing in UAE.

Guidelines for filing VAT return

There are certain basic guidelines that you need to follow while filing for the return:

  • Need to show all the amounts in AED currency only.
  • Need to round off the amount.
  • Update all the mandatory fields.
  • Enter “0” if there is nothing to declare.

When finishing your VAT filing, you have to make sure to get enclosed all business transactions, each outgoing and incoming, on your sheets and clearly determine what portion of every sale or purchase was VAT.
If you’re unsure on the way to file, or who to approach do make sure you consult an experienced accounting firm. We offer all kind of VAT Compliance, VAT Filing services and Accounting services in Dubai and UAE.

What happens after i file the VAT return?

Once your VAT return has been filed a calculation will be made between the VAT you received and the VAT you paid. The difference between these two amounts will be payable to the tax office, or subject to refund to you, the business owner. In the result of a refund you will have the choice to take the refund straight away or roll it over into your next tax period to offset VAT in the coming quarter.
All VAT payments deposited to FTA account through Bank Account, Wire Transfer, Exchange or e-Dirham card.

This blog post written by Ms. Suchita, Tax Advisor at Flyingcolour Business Setup, Accounting & Tax Services in Dubai and UAE. We have professionals who are well aware of the laws, rules & regulations in UAE which would help you in terms of your Accounting, VAT return filing, financial reports at affordable packages. Please send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366.

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