A voluntary disclosure should be made by a taxable person to notify the FTA of an error or omission in their tax return, tax assessment, or tax refund application. As per Article 8 of Cabinet Decision No. 36 of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures, voluntary disclosures are required to be made in the following cases:
- where a filed Tax Return or a Tax Assessment is incorrect resulting in a calculation of the Payable Tax being less than required i.e. an underpayment of tax due, in an amount of more than AED 10,000;
- where a filed Tax Return or a Tax Assessment is incorrect resulting in a calculation of the Payable Tax being less than required i.e. an underpayment of tax due, by not more than AED 10,000 and there is no Tax Return through which the error can be corrected; or
- where a filed Tax Refund Application is incorrect, resulting in a calculation of a refund to which the Taxpayer is entitled being more than the correct amount unless the error was a result of an incorrect Tax Return or Tax Assessment.
Time limit for Filing Voluntary Disclosure
The voluntary disclosure must be made within 20 business days of discovering the error or penalties may apply.
How businesses can find Errors/ mistakes in already filed VAT Returns- VAT Audit Review
A VAT Audit-Review by a Registered Tax Agency (Approved from Federal Tax Authority of UAE) can help you to find all the errors/mistakes/omissions in your VAT returns in order to minimize the risk of fines and penalties in case of Tax –Assessment by FTA. It will also ensure that you do not create VAT issues for your customers which can adversely affect your commercial relationship.
Our approach to carrying out VAT Audit reviews is flexible and targeted to the needs of individual businesses; we will not follow exactly the same procedure for each review as we recognize that every business and every issue faced is unique. We will look at the processes that the business has established for managing VAT and will consider the controls that are in place to manage risk. This is essential in order to find errors/mistakes done in previous returns and also for demonstrating to tax authorities that the business has the appropriate risk management structure.
At the end of the process of VAT Audit Review, a detailed VAT Report is produced highlighting areas of concern which may cover a broad range of observations on deficiencies/errors/mistakes, including impact & recommendations for corrections of those errors.
MBG VAT Consultancy services is focused on five unique principles;
International focus – Cross-border VAT issues are our core competency and each of our consultants has international experience.
Multi-Cultural staff – We have the necessary capabilities to deal with all VAT offices across GCC. Our staffs have gained vast cross-cultural experience by virtue of working with Japanese, Chinese, Russian, Arabic & European business verticals in Middle East Region.
Centralization of Expertise – Centralisation allows us to gain efficiencies of scale and apply tight quality controls much more easily. However, we do not believe in a “one size fits all” approach to VAT procedures – we remain focused on the peculiarities of each business. While providing any advisory, we believe in 6 eyes policy review so that every work should be a double check.
Practical Approach – We believe in giving advice that provides practical solutions to our clients’ problems.
Seamless integration with our other Service Lines – Our consultancy capabilities seamlessly complements our other service offerings which as a total solution provide greater all round benefits to our clients. The closeness to the heart of your business through these other services, help our consultants offer you more practical and focused assistance.
Last Updated: 14th June 2019
This article is contributed by:
CA Vipin Kumar Ahuja
Senior Manager, Taxation
Tag: Vat, VAT in UAE, VAT News, VAT Update
