VAT and Excise Tax : Updated Voluntary Disclosure User Guide
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VAT and Excise Tax

VAT and Excise Tax in UAE : Updated Voluntary Disclosure User Guide

The VAT registered businesses in the UAE are supposed to fill out a voluntary disclosure form provided by the Federal Tax Authority in case they find any discrepancy with the previous tax assessments and tax returns. These voluntary disclosure forms enabled the business entities who are registered for VAT to notify the FTA about any error or omission that might have happened in the previous tax return, tax assessment, or tax refund application. In this article, we shall be discussing the updated voluntary disclosure user guide for VAT and excise taxes. At the end of the article, you will be able to provide accurate answers to the questions that are present in the voluntary disclosure form for VAT and excise tax and will also help you understand all the icons and symbols that you might find in the form. One must consult the tax agent in UAE who are available at your service at VAT registration in UAE to help you in filling up the voluntary disclosure for VAT in the UAE.

Purpose of filing Voluntary disclosure for VAT and excise tax?

A voluntary disclosure form is a form that is provided by the Federal Tax Authority that helps the taxpayer in notifying any error or omission that might have happened in the previous tax returns, tax assessment applications or tax refund appeals.

Scenarios when the voluntary disclosure guide can be submitted by the tax applicant

There are various scenarios when the tax applicant should submit the voluntary disclosure form. These are discussed below:

  1. In cases where the user understands that a tax assessment or a tax return submitted by him is having an error that has resulted in the net payable tax being lesser than the actual payable tax.
  2. In cases where the user understands that a tax refund application submitted by him is having an error that has resulted in calculating the refund amount to which he is allowed to be more than it should have been.
  3. In cases where the user understands that a tax assessment or a tax return submitted by him is having an error that has resulted in the net payable tax being more than the actual payable tax.
  4. In cases where the user understands that a tax refund application submitted by him is having an error that has resulted in calculating the refund amount to which he is allowed to being less than it should have been.

The voluntary disclosure must be made within 20 working days of discovering the error and any delay may result in penalties and fines on the taxable person.

Read also: How to file VAT return in UAE?

Steps to fill the voluntary disclosure form for VAT and excise tax

The procedure to fill out the voluntary disclosure form given by the FTA is quite simple and is discussed in detail below. The form for the voluntary disclosure is available in the e-services portal of the FTA and after submission, the status of the form can also be tracked easily through the portal.

  1. For submitting the voluntary disclosure against a VAT return that has already been submitted to the FTA, the user must go to the VAT returns tab in the e-services portal and click on the voluntary disclosure button in the row of the relevant VAT return for which the voluntary disclosure is to be made. In case such an option is not available in this section, then it means that the voluntary disclosure has already been submitted against that period and the same can be accessed in the tax assessment section.
  2. Once the submit voluntary disclosure tab is clicked, the voluntary disclosure form opens. The taxable person must fill in all the details and updated values in this form. After checking all the details that are prepopulated by the system, the date on which the error has been identified must be entered. In case of multiple errors, the date on which the first error was done has to be entered.
  3. The voluntary disclosure form has 2 sections- as reported and as current. The as-reported section has pre-populated figures available as submitted at the time of filing the return. The current section needs to be filled with the corrected amounts that should have been reported. In case of no errors, the as reported and as current values should remain the same.
  4. Next, the supporting documents must be uploaded in which a letter must be given which provides the background facts and a detailed description of the errors cited in the form. The letter must mention why the voluntary disclosure is being done and also the errors disclosed and should also mention the details of the affected sections for tax return. The declaration form should be reviewed and checked if the taxable person agrees to it.
  5. Lastly, the taxable person should submit the form. An incomplete form will be saved as a draft and can be retrieved later for submission. The form can also be cancelled by clicking the cancel button. The taxable person can view the submitted voluntary disclosure form by clicking the tax assessment tab.

The payment can be made to FTA by using the payment guide. FTA may apply fines and penalties depending upon the specific cases. Therefore, in case you have any doubts on how to submit the voluntary disclosure user form in the UAE, you must consult the tax agent in the UAE.

Latest updates issued by FTA in the voluntary disclosure user guide

Recently, the FTA has issued an amendment in the voluntary disclosure user guide for VAT and excise tax purposes. These changes are further explaining the requirements and process specifically related to the submission of voluntary disclosures for active and deregistered tax groups. The changes have been brought to encourage the tax members to file the voluntary disclosure forms for the errors that have been committed by them so that the penalties are minimized. These changes are as mentioned below-

  1. The tax group voluntary disclosures must be submitted by the active group representative only. In case the group has been deregistered then the last representative member can do the work.
  2. The other tax group members are only allowed to see the submissions made to the FTA by the active member.
  3. The voluntary disclosures can only be submitted against the VAT returns that have been already submitted, acknowledged voluntary disclosures, or acknowledged tax assessments. The voluntary disclosure user guide will give the tax member the procedure to access the voluntary disclosure form in various situations.
  4. As per the latest guidelines, an official letter must be prepared and attached for the review of the tax authority along with the disclosure form. This letter must include the background facts and a detailed description of the errors that have been disclosed. The letter needs to be written regardless of whether the disclosure has been submitted by an active member or a deregistered tax group.

How VAT registration UAE can help you in filling the voluntary disclosure form in the UAE?

So, if you are not sure how to submit the voluntary disclosure form for the errors that have been made in your previous tax returns, simply get in touch with the experts at VAT registration UAE and they will help you in filling and submitting the same. They will ensure that everything is reported properly and will also try to minimize the penalties.

Read also: VAT Returns Fines and VAT Penalties in the UAE For Noncompliance

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions. Read more