Value-added tax remains the most complex taxation system in the United Arab Emirates, even after almost two years of its implementation. The federal tax authority does not only require the business owners to register for VAT, pay the taxes, file for VAT returns, look after penalties, and deregistration, but also file for voluntary VAT disclosure. VAT voluntary disclosure is a new concept for the taxpayer, which adds to their tax worries.
What is VAT Voluntary Disclosure?
To error is human, and it can happen in any field of life, which also includes VAT. VAT voluntary disclosure is a form issued by the federal tax authority that requires the taxpayers to notify the authorities about any omission or error in the tax return, tax refund, or tax assessment. So, if the taxpayers notice any issues with the tax amount, they are liable to communicate to the authorities through the voluntary disclosure form, which is also known as VAT211.
Explore the below-mentioned article to learn a brief guide about VAT voluntary disclosure in the UAE.
Top 5 Things to Know About VAT Voluntary Disclosure
Whether the taxpayers make a mistake in tax calculation or the federal tax authority makes a tax assessment mistake, the responsibility is always on the taxpayers’ shoulders to make the correction. They have to be very careful in the process, as any issue can lead them to face penalties.
Here are some crucial things that the taxpayers should know about VAT’s voluntary disclosure.
1. Time for Submission of Voluntary Disclosure Form
The first thing to know about VAT voluntary disclosure is the time of its submission. If there is an error or omission in the tax return or tax assessment, the taxpayers can submit the voluntary disclosure form under the following three conditions:
- The calculated payment amount is less than the required amount, highlighting the underpayment of tax against an amount more than AED 10,000.
- The calculated payment amount is less than the required amount, highlighting the underpayment of tax against an amount less than AED 10,000.
- The calculated refund amount is more than the correct amount to which the taxpayer is entitled.
Such minute details can confuse anyone but experts. Therefore, business organizations employ the service of the best VAT consultancy in Dubai to look after all the omissions and errors in tax amount and deal with the authorities without committing further mistakes.
2. Limitations of Submitting Disclosure Form
Submitting the VAT disclosure form also comes with some time limitations. These limitations are meant to make the process smooth. If the taxpayers do not follow such time limits, collection, and usage of tax amounts will become useless due to disorganization.
So, the taxpayers have to inform the authorities about the errors in the tax return and assessment within twenty days of identifying the mistake if the tax amount is greater, less, or equal to AED 10,000. On the other hand, in case of a tax refund mistake, the taxpayer can wait till the due date of the submission of tax returns.
3. Completing the Voluntary Disclosure Form
The next thing that the taxpayer needs to know about VAT voluntary disclosure is completing the form. The form can be accessed from the website of the federal tax authority. It should be carefully filled while ensuring not to repeat the mistakes. The form includes details like:
- Basic information
- Details of error
- Summary of errors
- Supporting documents
All of these details must be filled in and sent with the utmost care and attention.
4. Payment of Due Amount
The next thing in the process is the payment of the due amount. When you have submitted the VAT voluntary disclosure form, the authorities will recheck the due payments. Changes will be made in the tax amounts, which will then be communicated to the taxpayer. You can pay the due amount mentioned after correction.
The last part of the process is penalties. The federal tax authority has implemented penalties over errors or delays in payment of tax amounts. The penalties are decided upon the distinctive conditions and scenarios of errors.
If you think that you will commit so mistake in the process, it is better to rely on professional support instead of earning penalties. You can hire experts from the best VAT consultancy in Dubai to pay attention to each and every step of the process, complete with professional skill, and earn you benefit instead of penalties.
Maximize your benefit by submitting voluntary disclosure!
If the authorities have committed a mistake in VAT assessment, you can earn benefit by submitting voluntary disclosure. However, if you have committed an error, it is your responsibility to submit voluntary disclosure. If you do not do so, you may earn penalties. So pay attention to all the VAT-related matters and hire professional help if you are not confident about your skills to minimize your loss.