Things to know on VAT voluntary disclosure in UAE

FTA VAT Voluntary Disclosure in Dubai UAE
Voluntary Disclosure in Dubai UAE
VAT has now become an integral part for all UAE businesses. VAT voluntary disclosure in UAE, Paying VAT toFTA (Federal Tax Authority) in UAE must be done with utmost precision and accuracy. Then you must also learn about how to rectify errors if any with VAT voluntary disclosure.

First and foremost let us learn what Voluntary Disclosure is ?

It is nothing but a form provided by the Federal Tax Authority. It allows businessmen and taxpayers to notify the FTA about any mistakes or changes that are to be made in a Tax return or Tax Refund in Dubai .
A disclosure can be filled in circumstances where the taxpayer commits an error or any omission in a Tax Return, Tax Assessment or Tax Refund application. This form “”VAT211”” allows the taxpayers to make corrections Where a taxable person becomes aware of an error or omission in an excise tax return, tax assessment or refund application, depending on the scenario, he should or may notify the FTA of the error by submitting a voluntary disclosure.
  • If the taxpayers become aware that a tax return submitted by him to the FTA or a tax assessment sent to him by the FTA is incorrect, which resulted in a calculation of the payable tax being less than it should have been by more than 10,000 AED, he must submit a voluntary disclosure to correct such error.
  • If the taxpayers become aware that a tax refund application that he have submitted to the FTA is incorrect, which resulted in calculating the refund amount to which he is entitled, being more than it should have been, he must submit a voluntary disclosure to correct such error.
  • If the taxpayers become aware that a tax return submitted by him to the FTA or a tax assessment sent to him by the FTA is incorrect, which resulted in a calculation of the payable tax being more than it should have been, he may submit a voluntary disclosure to correct such error. If the taxpayer wants to make correction he has to check the variance. if the variance is more than 10,000 AED he only can make corrections by voluntary disclosure, less than that, he can adjust in the subsequent period.
  • If the taxpayers become aware that a tax refund application that he have submitted to the FTA is incorrect, which resulted in calculating the refund amount to which he is entitled being less than it should have been, he may submit a voluntary disclosure to correct such error.
Now as we have learnt about what is VAT voluntary disclosure in UAE, we must also be aware of other details like – what the documents required to be submitted along with voluntary disclosure to support this. Most obviously all documents must be attached and uploaded to support and explain the details of the errors along with a letter that carries the facts and the reason for the need of submitting voluntary disclosure.
Are there any penalties involved while submitting voluntary disclosure? Yes, there are two types of penalties for submitting Voluntary Disclosure for the first time, there is a fixed penalty of AED 3,000; and second or repeated submission the penalty can go up to AED 5,000 or even more.
Other than these, there is more to know about how much FTA penalises which is based on percentage. The details are shared below:
Other than these, there is more to know about how much FTA penalises which is based on percentage. The details are shared below:
  • In case of Voluntary Disclosure has been filed before the authority notifies the taxable person and before tax audit, then a 5% of the tax amount which was not disclosed earlier will be charged as penalty.
  • In cases of Voluntary Disclosure being filed after the notification made by the authority for a tax audit yet it is before starting the audit, then 30% of the unpaid tax amount is charged as a penalty.
  • If the Voluntary Disclosure is filed after auditing, then 50% of the unpaid tax amount is charged as penalty.
These are some fundamental details of Voluntary disclosure for VAT in UAE . So when filing Voluntary Disclosure in case of errors made in the tax return, these details will definitely aid you to do it properly and with accuracy. If you still have doubts it is best to take advice from the experts like reputed VAT Consultant in Dubai who will help you to fill them.

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