UAE tax authority warns VAT deadline approaching

The UAE’s Federal Tax Authority (FTA) has warned registered businesses that they have only until the end of this month to file their first value added tax returns.

The deadline applies to businesses whose first tax period ended on January 31. They must file their returns for the first tax period no later than February 28.

FTA director general Khalid Ali Al Bustani reminded business of the importance of submitting returns, which are required on a monthly or quarterly basis depending on the annual revenue of the company, on time.

As a sign of the challenges businesses are facing after the 5 per cent tax’s introduction on January 1, the FTA last month extended the tax period from one to three months for some companies.

The extension followed calls from businesses and will see the first tax period extended to four months for some and five months for others.

Companies whose first tax period was the opening quarter of the end year ending in March were not subject to the change.

Businesses in the UAE that sell goods or services subject to VAT exceeding Dhs375,000 ($102,00) are required to submit tax returns and pay their dues within a set timeframe or face penalties. They must also keep records of all supplies and imports and goods and services and related documents.

The country’s tax regulation states that returns must be received no later than 28 days after the end of the tax period.

The penalty for those who fail to pay tax is no less than Dhs500 ($136) and no more than triple the value of the tax on the transaction in question. A first incorrect tax filing will result in a fine of Dhs3,000 ($817). Each following error will then result in a Dhs5,000 ($1,361) fine.

Payment can be made via the e-Dirham system and returns are submitted by the FTA website.

Tax returns must include 
The value of standard-rated supplies made in the tax period and the output tax charged
The value of zero-rated supplies made in the tax period
The value of exempt supplies made in the tax period
The value of any reverse-charged supplies received in the tax period
The value of expenses incurred in the tax period (if the business in question is looking to recover input tax and the amount of recoverable tax)
The total amount of tax due and recoverable input tax for the tax period
The payable tax (or repayable) for the tax period

Source:http://gulfbusiness.com/uae-tax-authority-warns-vat-deadline-approaching/

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