Accurate tax returns are essential for successful VAT payment and refunds. UAE legislation provides for substantial penalties for failure to submit VAT returns or submission of incorrect returns.

All VAT returns must be filed online through the FTA portal by the taxpayer or any other person authorised to do so on behalf of the taxpayer.

Types of tax returns in the UAE, depending on the nature of operations:

— Tax return with tax payable for the period.
— Tax return with FTA tax refund for the period.

Where taxes are refundable, the taxable person may carry forward the excess to the next tax period to offset future tax liability or claim the excess as a refund. To claim the excess tax as a refund, an additional online form for submitting a tax refund application must be completed and submitted to the FTA.

Tax returns must be prepared with particular care, paying special attention to the following:

— The number of supplies received covered by the Reverse Charge Mechanism, as they have no financial impact on the final tax assessment.
— The calculation of supply value must be carried out in accordance with the requirements of the UAE VAT Law.
— Transactions where refunds are made in non-cash form are often overlooked, as they do not involve any actual cash flow that could be recorded in the accounting books.
— The portal automatically selects the value of imported goods from UAE customs. However, adjustments to import value due to differences in exchange rates used by customs and the rate set by the FTA when exercising its powers under VAT legislation must be entered in the VAT return in the relevant fields.

Garant Business Consultancy has its own team of tax consultants and accountants who work with many clients with various business and corporate structures. The company's specialists are well versed in the intricacies of VAT accounting in the UAE and the preparation of VAT returns for various business sectors.