The countries of the Gulf Cooperation including the UAE have introduced the VAT tax beginning from January 2018. It comprises 5% and is levied on goods and services. The UAE authorities have long discussed this. However, some businesses still find it hard to get used to the changes in the legislation.
The Federal Tax Authority has decided to extend the dates for filing the first VAT return. “It will reduce and facilitate the process of reporting the pressure on companies,” the FTA says. The first return period is January 1-May 31 2018. Then it will work on a quarterly basis. The subsequent returns have to be filed for the periods June 1-August 31, September 1-November 30, December 1-February 28-29.
Companies can check the tax period on the website of the Federal Tax Authority. The dates can vary – while some organizations have a month deferral period, for the others it's five months. The tax period has been relaxed to enable businesses to adjust better to the changes in the UAE legislation since such changes have been introduced only recently.
Since the timelines have been re-considered companies can file their first tax return after five months means in June. All of these changes have only one aim – to assist companies in the process of complying. This way, enterprises will be able to cope with the alterations that accompany the introduction of the VAT. Moreover, it will help them to avoid any violations of the law.
The UAE authorities realize that businesses need extra time to rearrange the processes and structure them in the proper way. This relaxation of the timeline will allow companies to check once again if everything is working the way it should.