Corporate Tax Return Filing

To file VAT returns in the UAE:

1. Log in to EmaraTax with your TRN.
2. Select the relevant tax period.
3. Enter output VAT on sales (standard, zero-rated, exempt).
4. Enter input VAT on purchases, imports, and reverse charge transactions.
5. Review net VAT payable or refundable.
6. Upload supporting documents if requested.
7. Submit and pay VAT due before the deadline.
   A mistake in these steps can trigger penalties or an FTA audit.

VAT returns are usually due within 28 days after the tax period ends (monthly or quarterly depending on FTA assignment).

• Late filing penalty: AED 1,000 for first offense, AED 2,000 for subsequent.
• Late payment penalty: 2% immediately, 4% after 7 days, and 1% per month (capped at 300%).
  Missing deadlines can also affect your ability to claim VAT refunds.

Mainland companies must report all taxable supplies and imports. Free Zone companies in Designated Zones may be exempt from VAT on specific transactions, but must still declare imports, exports, and intra-GCC sales. Failure to differentiate Designated vs Non-Designated Free Zones often causes errors in VAT return filing.

For imports, businesses must self-account VAT under RCM. This means VAT is declared both as output VAT (sales) and input VAT (purchases) in the return. Incorrect reporting under RCM is a major reason FTA rejects or queries VAT returns.

Minor errors can be corrected in the next VAT return if they do not exceed AED 10,000. For higher discrepancies, a Voluntary Disclosure (Form 211) must be submitted. Ignoring errors increases audit risks and attracts penalties starting from AED 3,000.

Businesses should maintain:

• Tax invoices and credit/debit notes.
• Customs declarations for imports/exports.
• Proof of zero-rated/export supplies (airway bills, contracts).
• Bank statements for VAT payments/refunds.
• Accounting records (kept for minimum 5 years).
  FTA may request these during return validation or audits.

When input VAT is higher, businesses can either:

• Request a refund using Form VAT311 along with the return, or
• Carry forward the credit to the next tax period.
  FTA typically processes refunds within 20 working days, but incomplete documents delay approval.

• Declaring exempt supplies as zero-rated.
• Not including imports under RCM.
• Claiming ineligible input VAT (entertainment, personal expenses).
• Missing credit note adjustments.
• Filing with inconsistent turnover figures compared to audited accounts.
  These errors raise red flags for FTA audits.

Exports outside the GCC are zero-rated but require customs/export documentation. Intra-GCC supplies may be taxable or zero-rated depending on recipient’s VAT registration status. Incorrect reporting of GCC transactions is one of the top triggers of FTA queries.

Yes, businesses under common ownership may apply for VAT group registration. Once approved, they file a single consolidated VAT return. This eliminates VAT on inter-company transactions but creates joint liability—meaning penalties on one entity apply to the whole group.