As you know, the UAE does not have the majority of taxes common to citizens of other countries, but nevertheless, certain fees still have to be paid, for example, 5% VAT. When conducting accounting in free zones, after each tax period, one must submit a tax return form to the Authority in the local Emirate office (Abu Dhabi, Dubai, Sharjah, or other). Here we look at the rules related to filing a financial report in this country.
The standard tax period applicable to a taxable person is a period of three calendar months ending on the date established by the UAE Tax Service. As an exception, the Authority may assign a shorter or longer Tax period to any person if it considers that a non-standard length of the Tax period is necessary.
If a person becomes an incompetent person, then his/her current Tax period will end on the day before a person becomes incompetent. A new period will start on the day when a person becomes incompetent on behalf of the legal representative. The legal representative for the period of incapacity will be considered the registered VAT payer.
In most of the free zones of the country, there is a requirement for a mandatory audit. The audit institution regularly conducts a systematic analysis of the company's operations and transactions to determine that they coexist in the declared field of activity.
Tax return and payment in accounting in the UAE
The tax return must be submitted to the relevant Authority no later than the 28th day after the end of the relevant period or other date indicated by the Authority.
The taxable person must pay a fee according to tax return using the funds indicated by the Authority so that a payment is received by the Tax Service no later than the date indicated above (the 28th day or the date established by the Authority).
In cases in which the refundable VAT for the tax period exceeds the VAT calculated for the Tax period, the excess refundable VAT may be returned to the taxable person. The tax return should contain the details which the Authority may require, and, minimally should include the following information:
- Name, address, and TRN of the person registered for VAT purposes.
- The period to which the tax return relates.
- Date of application.
- The value of taxable supplies made by a person during the period and calculated withholding VAT.
- The value of taxable supplies taxed with zero rate VAT made by a person during the period.
- Cost of supplies exempted from VAT made by a person during the period.
- The cost of supplies at which the taxable person imports VAT-related goods or VAT-related services.
- The expenses incurred in respect of which the person seeks to refund the Input VAT and the amount of the refundable VAT.
- The total amount of accrued VAT and refundable VAT for the period.
- Tax payable for the period.
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