VAT Return Filing Services in Abu Dhabi

VAT return filing is an important compliance requirement for businesses in Abu Dhabi, UAE. This VAT forms a part of the United Arab Emirates' fiscal package implemented in 2018 with the objective to diversify revenue streams and promote economic growth. The taxation scheme provided in the UAE imposes a 5% value-added tax on most goods and services transactions while exempting others. Here, A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 over the previous 12 months. Most VAT-registered businesses are assigned a quarterly tax period. Businesses with very large annual taxable supplies will be required to file monthly. The exact tax period is assigned by the FTA when registration is approved.

Besides, timely filing of VAT returns is vital for companies to avoid the arising of penalties and fines, along with reputational loss. The correct VAT return keeps a company in FTA compliance and allows for VAT credit reclamation.

Who Needs to File VAT Returns?

When businesses in Abu Dhabi are registered for Value Added Tax(VAT), all registered taxable persons/ individuals and firms alike have to file VAT returns. As a general rule, taxable supplies and imports that are equal to or more than AED 375,000 per annum require the filing of VAT returns. This is simply to make sure all VAT registered entities file information on sales and purchases with the Federal Tax Authority.

Requirements on Frequency:

The return filing for VAT is mostly based on the turnover of the business in a year. VAT filing frequency is generally assigned by the FTA. Businesses with annual taxable supplies of AED 150 million or more are typically required to file monthly; most other businesses are quarterly. Annual filing is rare and granted only where specified by the FTA.

Filing Thresholds by Filing Frequency

• Monthly Filing: Any business whose taxable supplies exceed AED 3 million.
• Quarterly Filing: All businesses whose taxable supplies fall within the range of AED 1.5 million to AED 3 million.
• Annual Filing: Granted to businesses whose taxable supplies amount to less than AED 1.5 million.
   

VAT Return Filing Process

VAT return filing in the UAE, Abu Dhabi inclusive, constitutes a formal process that businesses have to strictly abide by in order to be in compliance with the Federal Tax Authority, FTA regulations. There is a step-by-step VAT return filing on the FTA portal, and all relevant information related to this process can be found there along with the submitting deadlines.

Step by Step Guide to Filing VAT Returns

Login to the FTA Portal:

Go to the FTA site using your registered credentials for accessing the portal.

• Step 1: Open the VAT Return Section Locate the VAT return section in your account management dashboard
• Choose the right tax period on which you are filing the return. While doing so, the system automatically populates VAT return period reference number and the due date.
• Fill up Required Details Key in the details necessitated by this stage, including Tax Registration Number (TRN)
• Ensure every entry is accurate and complete, and that numeric fields are correctly rounded to the appropriate number of decimal places.
• When you have completed your checking, then you submit your return online through the gateway.
• When you submit your return through the FTA (e-Services/EmaraTax) the system will confirm receipt and retain the submission confirmation for your records.
   

Information to be Included in the VAT Return Form

The following are some essential information that would appear in the VAT return form:

• Information of the Taxable Person: Name, address, and TRN.
• VAT Return Period: Highlight the relevant filing period, as well as the date by which one should file the returns.
• Output VAT: Mark taxable supplies at normal rates, zero-rated supplies, and those exempted.
• Input VAT: Point out all the expenses where VAT has been paid
• Net VAT Payable: Calculate tax payable against recoverable input tax.

Submission Deadlines for VAT Returns

• VAT returns and payments are due within 28 days from the end of the tax period. If the due date falls on a weekend or official holiday, the deadline is extended to the next business day.
• Monthly filers: if your tax month ends on 31st January, your return will fall due on 28th February
• Quarterly filers: if your quarter closes on 31st March, your return will fall due as 28th April
• If the deadline falls on a weekend or public holiday, it is shifted to the next business day.
   

Document required for VAT return filing 

• Trade License: This is the basis for your company's legal existence in the UAE. Businesses must have a valid trading license in order to register for VAT and make additional filings. To avoid complications for enterprises operating in the UAE, trade licenses should be renewed before they expire.
• Tax Registration Certificate: This certificate, issued by the Federal Tax Authority (FTA), attests to your company's VAT registration. It is important to file returns and provide a formal identity in the VAT system.
• Tax Invoices: The foundation of your VAT records is your tax invoices. The FTA requires that all details, including supplier and recipient information, invoice date and number, itemized descriptions, taxable amounts, and VAT rates, be included on all invoices issued for taxable supplies and services.
• Purchase Invoices: These are records of your input VAT or the tax you must pay on things purchased for your company. They should be retained for audit purposes and contain information similar to that of tax invoices.
• Financial Documents and Bank Statements: These provide a thorough picture of your company's economic activity and aid in accurate VAT computations. Cash flow, balance sheet, and profit and loss statements are some terms that might provide useful information. Statements should cover the appropriate tax period.
• Import Declarations: If your company imports products that are subject to VAT, these serve as proof of import and payment.
• Export Declarations: These documents streamline export procedures and demonstrate the zero-rating of VAT for products exported.
• Credit and Debit Notes: These make the necessary changes to previously mailed bills due to errors, cancellations, or returns. They must be suitably justified and documented. Records for the Reverse Charge Mechanism: This applies to select industries where the recipient is responsible for paying VAT rather than the provider. Maintain up-to-date records of all transactions conducted using this system.
• Audited Financial Reports: If your company is subject to an external audit, the FTA may request audited reports for specific VAT filings.

Late Filing Penalties

• Submitting on time: Failure in compliance will occur if VAT returns are not submitted on time and appropriate penalties may be imposed.
• Failure to meet the payment deadline: In case of failure to pay VAT by the prescribed deadline, the tax authority will charge extra interest and levy a fine on payment.
• Accrual of penalties and interest: Continuing VAT delay in submissions and payment leads to accrual of penalties and interest, which might also be heavily costed for the business.
   

Benefits of  professional VAT return filing services 

Accurate Calculation and Filing of VAT Returns:

Mistakes, especially those calculated by checking output and input VAT, are risks removed by professionals.

Keeping Track of UAE VAT Legislation Changes:

Experts know the new rules; therefore, all filings are compliant with the current rules.

Risk Reduction from Penalties Due to Failure to Meet or File Inaccurately:

Professionals keep you away from penalties resulting from failing to file in time or due to mistakes when filing returns.

Support in Claiming VAT Refunds (if applicable):

They help firms by walking them through the process of reclaiming VAT on purchases made that may be subject to a refund

VAT return  filing deadlines and penalties 

• VAT returns are due by the 28th day of the month following the end of the tax period (monthly or quarterly).
• Late submission incurs a penalty of AED 1,000, increasing to AED 2,000 for repeat offences within 24 months.
• Incorrect returns may also attract similar penalties.
• There is no official grace period; thus, timely filing is crucial.
• To avoid penalties, businesses should maintain accurate records, file returns on time, and consult with VAT professionals when needed.

Why choose VAT return filing services?

Expert assistance in preparing VAT returns

Choosing VAT return filing services allows businesses to employ expert resources to prepare accurate and compliant returns, ensuring correct data, all supporting documents are in order, and corresponding accuracy in all computations and fewer opportunities for error and penalty. 

Time-saving and hassle-free process

VAT return outsourcing saves precious time and effort for businesses. Allow experts to handle complicated regulations of VAT free up resource time to focus on core activities. The hassle-free process reduces stress related to it, along with ensuring timely submission.

Deter Costly Mistakes

VAT return filing services help prevent the costly mistakes associated with it. Experts ensure accuracy in VAT calculations while avoiding penalties and fines. This can prevent costly losses and reputational damage.

Long-term VAT advisory services for compliance

One of the benefits that a business company derives from reputable VAT return filing services includes long-term advisory support by the firm to ensure continuous compliance. Experts will ensure that a business firm keeps getting informed on changes in VAT regulations so that they can get on board the optimal VAT strategies and best practices available.

Conclusion

It is also important to keep in mind VAT compliance awareness in Abu Dhabi, and therefore businessmen would stay active and correct in the context of reports and return submissions. Issues such as mere financial books, proper usage of VAT rates, and accounting of exemptions, must be assured to prevent penalties and easy tax processes. Reyson Badger advises professionally on simplifying the VAT filing process of a company and also ensuring complete compliance with the requirements laid down by the Federal Tax Authority.

For personalised VAT return filing advice and additional detailed tax advice, contact Reyson Badger today to enhance your business's tax effectiveness and tax compliance.