Things to know on VAT voluntary disclosure in UAE FTA VAT Voluntary Disclosure in Dubai UAE
Things to know about the UAE FTA’s voluntary VAT declaration Dubai’s Voluntary VAT Disclosure UAE VAT is currently a crucial component of all UAE enterprises. VAT payment to FTA (Federal Tax Authority) in UAE must be completed with the utmost precision and accuracy. Then, it would be best if you learned how to use VAT voluntary disclosure to correct any errors that may have occurred.
Let's first understand what voluntary disclosure is.
It is merely a form that the Federal Tax Authority has issued. It enables taxpayers and businesspeople to inform the FTA of any errors or modifications that need to be made in a tax return or tax refund in Dubai
What situations in the UAE require a taxpayer to employ a voluntary VAT disclosure?
A disclosure can be made if a taxpayer makes a mistake or leaves something out of a Tax Return, Tax Assessment, or Tax Refund application. The taxpayers can make corrections using this form, “VAT211.” Depending on the circumstance, a taxable person should or may submit a voluntary disclosure to the FTA to advise it of any errors or omissions in an excise tax return, tax assessment, or refund application.
What are the fundamental requirements for submitting a VAT voluntary disclosure form in the UAE?
Taxpayers are required to submit a voluntary disclosure to correct errors if they become aware that a tax return they submitted to the FTA or a tax assessment they received from the FTA is inaccurate and led to a calculation of the payable tax that was less than it should have been by more than 10,000 AED.
The taxpayer is required to submit a voluntary disclosure to correct a mistake if he learns that a tax refund application he submitted to the FTA was wrong and that the calculation of the refund amount to which he is entitled was higher than it should have been.
The taxpayer may submit a voluntary disclosure to fix an error if he learns that a tax return he filed to the FTA or a tax assessment it sent to him was inaccurate and led to an overestimation of the amount of tax payable. The taxpayer must examine the variance if he wants to make a correction. If the difference is greater than 10,000 AED, he can only make changes by voluntary disclosure; if it’s less, he can do so in the period after.
The taxpayer may submit a voluntary disclosure to fix a mistake if he learns that a tax refund application he submitted to the FTA was incomplete, which led to the calculation of the refund amount to which he is entitled being less than it should have been.
Now that we are aware of what VAT voluntary disclosure in the UAE is, we must also be aware of additional information, such as the documents that must be given in support of voluntary disclosure. Obviously, all supporting documentation must be uploaded and attached, and a letter outlining the specifics of the errors and the necessity to submit a voluntary disclosure must also be included.
Are there any consequences for making a voluntary disclosure? Yes, there are two different kinds of penalties for submitting a voluntary disclosure: the first time, the penalty is fixed at AED 3,000; the second or subsequent times, the penalty can be as high as AED 5,000.
Other than this, there is more to know about the percentage-based FTA penalties. The information is provided below:
Other than this, there is more to know about the percentage-based FTA penalties. The information is provided below:
A penalty of 5% of the tax amount that wasn’t declared earlier will be assessed in cases where the voluntary disclosure was made before the authority notified the taxpayer and before the tax audit.
When a Voluntary Disclosure is submitted following the authority’s notification of a tax audit but prior to the audit’s commencement, a penalty of 30% of the unpaid tax amount is imposed.
If the voluntary disclosure is submitted following an audit, a penalty of 50% of the unpaid tax amount will be assessed.
These are some essential specifics about the UAE’s voluntary declaration of VAT. These facts will therefore help you to complete Voluntary Disclosure in the event that tax return errors have been made correctly and accurately. If you still have questions, it is best to get guidance from professionals, such as a reputable VAT Consultant in Dubai, who can assist you in answering them.