UAE: Federal Tax Authority has announced extension for filing of VAT Return and settling of payable tax

In light of the unprecedented precautionary measures undertaken by UAE to curb the spread of COVID-19 and in order to provide a relief to the taxpayers, the Federal Tax Authority of UAE has announced a general extension of one month for filing VAT return and payment of related tax. This extension will apply to the VAT return for the tax- period ended on March 31, 2020.

VAT Registrants must fulfill the following obligations:

• If they are subject to monthly fillings, file their tax returns and settle their payment tax for the period from 1 to 31 March 2020, no later than Thursday May 28, 2020.
• If they are subject to quarterly fillings, file their tax returns and settle their payment tax for the period from 1 January 2020 to 31 March 2020, no later than Thursday May 28, 2020.
• Ensure that the FTA has received the tax payable for the monthly/ quarterly return for the period ending 31 March 2020, by Thursday, May 28, 2020.

Please note this exceptional directive pertains only to VAT Returns for the Tax periods that ended on 31 March 2020, and does not affect any other tax periods where the normal deadlines for filling tax returns and settling of payable taxes does not fall in April 2020.

Should you wait until May to file your returns and payment of taxes?

Allowing more time to settle payable tax will certainly ease burden on already strained working capital position of affected businesses But if the business is in refundable position, than we recommend that company should file their return on schedule date i.e. 28th April,2020 followed by filing of VAT Refund Application (Form 311) instead of delaying the process till 28th May,2020 and get the refund processed to ease company’s working capital position.