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2020/09/15

VAT Voluntary Disclosure In UAE

Tanvi Fal Dessai

He approaches one of his friend who tells him about the VAT Voluntary Disclosure Form 211

Are you finding yourself in a similar situation?

Continue reading to learn more about how you can rectify the error via VAT Voluntary Disclosure Form 211

Paying VAT to FTA in UAE must be done with utmost detailed accuracy and precision, with VAT becoming an integral part of all UAE businesses. But what if one makes an error in filing their VAT Returns?

Voluntary disclosure is a form in UAE furnished by the Federal Tax Authority (FTA) to allow businesses and taxpayers to inform FTA about the mistakes/errors and omission/modifications in a Tax Refund or Tax Returns. The VAT Voluntary disclosure form 211 in UAE enables a taxable person to make corrections within the errors they have committed while filing a VAT return or applying for the VAT Refund. It offers the taxable person or business a preference to voluntarily disclose the mistakes they’ve carried out within the preceding VAT return or VAT Refund.

VAT Voluntary Disclosure form 211

Suppose a taxable individual makes an error or omission or incorrect treatment of Tax. The input tax receivables or output tax payable is more than AED 10,000/- for a particular duration. If so, he ought to use the VAT Voluntary Disclosure form 211 to inform the authority. There are distinctive situations when you should submit a VAT voluntary disclosure to the FTA.

What are the primary criteria for filling VAT voluntary disclosure in UAE?

  • Suppose the taxpayers become aware that a tax return submitted by him to the FTA or a tax evaluation sent to him via the FTA is incorrect, which led to a calculation of the Payable Tax being much less than it needs to be, he needs to publish a voluntary disclosure to correct such error.
  • Suppose the taxpayers become conscious that a tax refund application that he had submitted to the FTA is wrong, which led to calculating the refund amount to which he is entitled, being more than it needs to had been. If so, he ought to put up a voluntary disclosure to correct such errors.
  • Suppose the taxpayers become aware that a tax return submitted by him to the FTA or a tax evaluation sent to him by using the FTA is wrong, which resulted in a calculation of the Payable Tax being extra than it needs to. In that case, he may additionally submit a voluntary disclosure to correct such errors. 
  • Suppose the taxpayers become conscious that a tax refund utility he has submitted to the FTA is inaccurate, which resulted in calculating the refund quantity to which he is entitled to be less than it needs to have been. If so, he may additionally publish a voluntary disclosure to correct such error.

Are there any penalties involved while submitting VAT Voluntary Disclosure?

The taxable person can be liable to two different kinds of penalties for submitting Voluntary Disclosure.

For the first time submission: There is a fixed penalty of AED 3,000/-

Second or Repeated submission: The penalty can go up to AED 5,000/- or more

Apart from those, there is more to learn about how much FTA penalizes, primarily based on percent. The details are shared below:

  • Suppose Voluntary Disclosure has been filed earlier than the authority notifies the taxable person and earlier than the tax audit. In that case, a 5% of the tax amount that was not disclosed earlier will be charged as a penalty.
  • In instances of Voluntary Disclosure being filed after the notification made by the authority for a tax audit but before beginning the audit, 30% of the unpaid tax quantity is charged as a penalty.
  • If the Voluntary Disclosure is filed after auditing, 50% of the unpaid tax quantity is charged.

These are some necessary 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 help you do it correctly and accurately. If you still have doubts, it is best to advise the experts.

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