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Dubai is one of the major business centres globally and attracts companies from all over the world to set-up their presence in this booming market. While the business opportunities are available in Dubai aplenty, it is extremely important for the entities to abide by the local rules and regulations. Dubai is a region where the government enforces its rules and policies strictly. Any discrepancies might land the business owner in trouble. This is the precise reason that business owners in Dubai and Dubai avail the services of professional accounting consultants in Dubai.
Several tax reforms have been introduced in the Dubai in the last few years, but the most significant one is the introduction of VAT. Ever since the introduction of VAT in Dubai, the responsibility of businesses has increased manifolds. There are various compliances that need to be taken care of, including the filing of the returns and forms. VAT Return Form 201 is an important form under the Dubai VAT regime that is necessary to be filed by all registered businesses. Read on to know all about the Vat return Form 201 and its importance in the Dubai.
Importance of VAT Return Form 201
Federal Tax Authority (FTA), in order to modernise and simplify the tax return processes, introduced e-services portal for filing VAT return via the submission of VAT Return Form 201 which is available at the official FTA website.
Any business in Dubai who is registered for VAT filing under the FTA has to fill in the required information including VAT on sales and expenses and other details in the VAT 201 Form and has to submit it within 28 days from the end of the tax period which is held on a quarterly basis. But there may also be businesses who are obligated to file VAT returns on a monthly basis.
In the VAT Return Form 201, the taxpayers have to submit data at a consolidated level, which means VAT values of the total supplies are to be furnished. If a taxpayer misses the last date of filing the VAT returns, FTA can impose a penalty of AED 1000 for the first time, but the penalty would increase for subsequent late filing of VAT.
VAT Return Form 201 in Detail
VAT Return Form 201 consists of 7 broad sections – personal details of the Taxpayer, VAT return period details, VAT on Supplies and other outputs, VAT on Purchases and other inputs, Net VAT Due, Additional Reporting Requirements, Declaration and Signature.
Personal Details of the Taxpayer
Information like Tax Registration Number, Name of the Taxperson in English and Arabic, and Address are required.
VAT Return Period Details
The period for which a taxpayer is filing the VAT returns needs to be mentioned here. The filing is done on a quarterly basis; therefore, for the month of April-June, the VAT return period will be April-June 2020. The taxpayer’s vat return due date, his tax year-end, and VAT return period reference number should also be filled in.
VAT on Supplied and Other Outputs
A taxpayer has to furnish the VAT value of all the domestic supplies on which 5 per cent VAT is imposed – Standard Rated Supplies in Abu Dhabi, Fujairah, Dubai, Sharjah, Umm Al Quwain, Ras Al Khaimah, VAT charge on imports, details on Zero Rated supplies and exempt supplies should be provided in this section. In the last box, total sales and total VAT should be calculated and given.
VAT on Purchases and Other Inputs
Recoverable VAT amount on standard rated expenses (on which the taxpayer paid 5 per cent VAT) and the expenses subject to reverse change should be filled in. Note that the taxpayer must exclude input tax credit which the taxpayer is not eligible to claim from the total expenses and recoverable VAT amount.
Net VAT Due
Here the taxpayer needs to mention the total value of purchases tax and the total value of expenses tax that has been incurred in the respective tax period. The payable tax will be calculated by adjusting the output and the input tax. If the output tax is more than the recoverable input, it will lead to tax payable. If the output tax is lesser than the recoverable input, it will lead to VAT refundable.
Once the taxpayer is through with these mandatory details, he/ she can fill in the declaration section by re-filling name in English and Arabic, date of submission, mobile number, and checking the declaration box.
If there are any errors in VAT returns calculation, the taxpayer must report the matter under the Voluntary Disclosure Scheme. If the form has not been properly filled, or if any mandatory details have been missed out in the VAT Form 201, then the VAT Filing will be deemed as rather incomplete and will not be accepted.
The process of filing the VAT Return Form 201 in the Dubai is extremely important and should be done with utmost care. In order to avoid any inconveniences or hassles, it is highly recommended to avail the services of an accountant consultant in the Dubai. These professionals have multiple years of experience in these tasks and can handle all VAT related documentation and tasks for you.