At the end of each tax period, businesses that are registered for VAT (taxable persons) require to submit a VAT return to the Federal Tax Authority (FTA).
A VAT return reviews the worth of the supplies and purchases a taxable person may have generated in the course of the tax period, which depicts the taxable person’s VAT liability.
The difference between the output tax payable (i.e., VAT charges on supplies of goods/services) for a given period of tax and the input tax (i.e. the VAT gained on purchases) is calculated as the liability of VAT.
Therefore, if, the output tax value is greater than the input tax, the difference ought to be paid to FTA. However, in a vice-verse scenario, the taxable person will have a surplus input of the tax claimed; they will be permitted to set this off against consequent payment due to FTA.
VAT return filing, must be done online through the FTA portal eservices.tax.gov.ae. it is mandatory to make sure that all tax return requirements have been met, before filing for VAT return is proceeded with.
It is essential for taxable industries to file VAT returns with FTA typically within 28 days of the end of the ‘tax period’ which pre-defined for each business type. A ‘tax period’ defined as an exact period for which the payable tax will be evaluated and paid. The patterned tax period is:
1. Quarterly for companies with a yearly turnover below AED150 million
2. Monthly for companies with a yearly turnover of AED150 million or more
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