Businesses are required to provide information about their sales and purchases to the Federal Tax Authority as part of the VAT return filing process. It involves figuring out the VAT requirements which takes into account the discrepancy between the VAT collected on sales and the VAT paid on purchases over a given time frame. The tax authorities must receive this return on a regular basis, usually every quarter or month. Businesses with an annual turnover of less than AED 150 million pay their taxes quarterly, whereas those with an annual turnover of AED 150 million or overpay their taxes monthly. To ensure transparency in taxation, accurate reporting, and regular VAT payment by companies, VAT returns must be filed.
Documents Required for VAT Return Filing in UAE
Business Registration Documents:
In order to file VAT returns efficiently businesses must have their business registration documentation ready. This includes:
- Trade license: In the UAE, a trade license is a legal document granting authority to run a business.
- Tax Registration Certificate (TRC): The Tax Registration Certificate is yet another crucial document that businesses must possess in order to file their VAT returns. It includes basic business information including the Tax Registration Number (TRN) and the registration's commencement date.
- Article of association/ partnership agreement: This document explains the company's internal rules and regulations, as well as the duties and rights of its partners or members. It outlines the processes for making decisions, allocating profits, and settling disputes.
- Copy of passport and Emirates ID: Businesses in the UAE must additionally submit a copy of the owner's passport and Emirates ID when filing their VAT returns.
- Physical office location of the business: In order to make sure that the owner operates inside the UAE's tax jurisdiction, the business's physical address is also necessary.
- Contact details: Businesses must offer contact details, according to the FTA. This contains the owner's phone number, email address, and any additional contact details.
For more information : Required Documents for VAT Registration in UAE
Tax invoices document the supply of products or services to clients and specify the VAT incurred. For both input and output VAT calculations, having accurate tax invoices is essential. Tax invoices must include the following information:
- supplier's name and address
- recipient's name and address
- invoice date
- invoice number
- summary of the products or services
- quantity and unit price
- total consideration
- VAT amount
Bank Statements and Financial Reports
To confirm your financial activities and make sure that your VAT returns accurately reflect the funds coming into and going out of your business accounts, you must have access to bank statements. This includes:
- Profit and loss statements
- Balance sheets
- Cash flow statements
- Audited financial reports
- Loan agreements
- Tax payment records
Businesses in the UAE are required to submit a declaration that covers every aspect of their activities in order to ensure VAT compliance. These declarations are essential for promoting accountability and transparency. Business needs to provide declarations about:
- Business Activities: Businesses must specify their key operations in detail. This contains a thorough outline of the products or services they provide. To identify the appropriate VAT rates and rules, it is crucial to precisely define the purpose of activities.
- Actual or Estimated Financial Transaction Values: The actual or estimated values of a company's financial transactions must be reported. This includes both sales-related income and personal expenses. For correct VAT computations, accurate data needs to be provided.
- Turnover in the Last 12 Months: Businesses are required to provide proof of their turnover for the previous 12 months. These records help to establish the company's financial health and to calculate the VAT payments that are due.
- Details About Expected Turnover: For effective VAT planning and compliance, it is essential to estimate the monthly revenue. Businesses should give an estimate of their expected revenues and costs for the next 30 days.
- Details About Expected Exempt Supplies: To ensure that exempted supplies are handled properly in the VAT return, businesses must clearly identify and document them.
- Imports and Exports: Businesses involved in international trade must give comprehensive information about their imports and exports. This contains records such as invoices, customs declarations, and any necessary permits or licenses.
- Gulf Cooperation Council Activities of the Business: Any operations that the company has in other Gulf Cooperation Council (GCC) countries must be reported. This covers details on any GCC-based branches, subsidiaries, or joint ventures.
Read more: How to Cancel VAT Registration in UAE
Seek the Expert Services of VAT Registration UAE
In the UAE, filing VAT returns requires ensuring compliance with documentation requirements. Therefore, to effectively ensure compliance with the VAT law and provide all required documents, it is advisable for Taxable Persons to seek the expert services of VAT Registration UAE, a reputable Tax Consultant in Dubai. Thus, contact us today and we shall be glad to assist you.