UAE VAT Voluntary Disclosure
Registered Tax Agent Regulated by the FTA (Federal Tax Authority)
VAT Voluntary Disclosure Services in the UAE
Correct the error yourself, at 1% a month, before the FTA finds it and charges you far more.
The Federal Tax Authority uses advanced data systems to cross-reference tax returns, bank records, and third-party information to identify filing errors and discrepancies. Businesses that identify and disclose errors voluntarily before the FTA detects them benefit from significantly reduced penalties and a stronger compliance standing.
- Registered FTA tax agent, managing your submission directly through EmaraTax
- Full-process support, from error identification and liability calculation through to FTA settlement
- Deadline-aware guidance, since disclosure timing directly affects the penalty applied
Farahat & Co. guides businesses through the full voluntary disclosure process, from error identification and calculation through to FTA submission and resolution.
Our Specialists In VAT Voluntary Disclosure
Romany Shayb
Senior VAT Consultant
Ahmad Ali Jourieh
Senior VAT Consultant
Nayomi Jayaweera
VAT Consultant
As a Trusted VAT Consultancy in the UAE, Farahat & Co. Offers the Following VAT Services:
What Is a VAT Voluntary Disclosure?
A VAT voluntary disclosure is a formal submission made to the Federal Tax Authority to correct errors or omissions in previously filed VAT returns. It applies where a business has underpaid VAT, overclaimed input tax, or made an error in its tax reporting, and proactively brings the correct position to the FTA’s attention before a formal audit or investigation is initiated.
The voluntary disclosure process covers:
- Notifying the FTA of the intent to make a voluntary disclosure
- Identifying and clearly describing the errors or omissions
- Explaining why the errors occurred
- Calculating the correct VAT liability, along with applicable penalties and interest
- Submitting the disclosure through the EmaraTax portal
- FTA review and processing of the submission
- Reaching a formal agreement between the taxpayer and the FTA
Time Limits for VAT Voluntary Disclosure
The FTA sets clear deadlines for voluntary disclosure submissions depending on the value of the error identified.
- Errors above AED 10,000: where an error has resulted in an underpayment of VAT exceeding AED 10,000, the voluntary disclosure must be submitted within 20 business days of the date the error was identified.
- Errors of AED 10,000 or less: where the underpayment is AED 10,000 or less, the error may be corrected in the VAT return for the period in which it was discovered, provided it is submitted before the return’s due date.
- Where no VAT return is available: if there is no upcoming VAT return in which the correction can be made, the error must be reported to the FTA within 20 business days of it being identified.
Failing to disclose within the required timeframe results in higher penalties than those applied to timely voluntary disclosures.
Voluntary Disclosure Penalties
Voluntarily disclosed errors attract a reduced penalty of 1% per month of the underpaid amount, calculated from the original filing deadline through to the date of disclosure, under the framework introduced by Cabinet Decision No. 129 of 2025. This is significantly lower than the penalty applied when the FTA identifies the same error itself during an audit or review, currently a fixed 15% of the unpaid tax.
The practical takeaway is straightforward: the sooner an error is disclosed after the original filing deadline, the smaller the accumulated 1%-per-month exposure. Because these figures are updated periodically, businesses should confirm the currently applicable rate before assuming a specific figure applies to their situation.
How Farahat & Co. Can Help with VAT Voluntary Disclosure
Farahat & Co. manages the full voluntary disclosure process on your behalf, ensuring the submission is accurate, complete, and structured to achieve the best possible outcome with the FTA.
Error review and documentation
We review your VAT returns, financial records, and supporting documents to identify the nature and extent of the errors. The FTA requires a formal letter setting out the background facts, a detailed description of the errors, and the reasons they occurred. Our team prepares and submits this documentation on your behalf.
VAT liability calculation
We calculate both the incorrect amounts previously reported and the correct figures, presenting both to the FTA with full supporting documentation, giving the authority a clear, transparent view of the discrepancy and the corrected position.
Penalty assessment and settlement support
We advise on the applicable penalties, help you understand your options, and support the settlement process, including liaison with the FTA where required.
Why Voluntary Disclosure Beats Waiting for an FTA Audit
It is always preferable to make a voluntary disclosure before an FTA audit. Penalties for voluntarily disclosed errors, 1% per month, are significantly lower than the flat 15% penalty imposed when the FTA identifies the same issue during its own review. Early disclosure also demonstrates good faith and supports a stronger compliance standing with the authority, which can matter in how future filings and queries are treated.