VAT Voluntary Disclosure Form 211 in UAE

The Federal Tax Authority (FTA) provides a form that allows taxpayers to voluntarily alert the FTA of a mistake or omission in a prior tax return, tax assessment, or tax refund application. In the UAE, a VAT Voluntary Disclosure Form 211 assists a taxable person in correcting mistakes made when submitting a VAT Return in UAE or requesting a VAT Refund.

HLB HAMT has a team of VAT professionals who will walk you through the procedure and help you submit your VAT voluntary disclosure application in the correct format and on time to prevent rejection.

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    When should a VAT Voluntary Disclosure Form be presented?

    A VAT Voluntary Disclosure Form should or can be utilized by taxpayers and presented to the FTA in certain circumstances. In principle, this would be in situations when a taxpayer discovers a mistake or absence in a VAT return, VAT assessment, or VAT refund application, as described below:

    • If you discover that a VAT return you filed to the FTA or a VAT assessment you received from the FTA is inaccurate, resulting in a Payable Tax computation that is lower than the value, you must file a VAT Voluntary Disclosure to fix the problem.
    • If you discover that a VAT refund application you filed to the FTA was inaccurate and that the reimbursement sum that you are entitled was calculated incorrectly, you must make a Voluntary Disclosure to rectify the issue.
    • You may file a VAT Voluntary Disclosure to amend a mistake in a VAT return you filed to the FTA or a VAT Assessment you received from the FTA that resulted in a computation of the Payable Tax being higher than it ought to be.

    Penalty levied on Voluntary Disclosure in UAE

    The FTA will impose penalties if you use the Voluntary Disclosure Form. There will be two sorts of Voluntary Disclosure fines imposed:

    • Fixed Penalty for Voluntary Disclosure
    • Percentage-Based Penalty for Voluntary Disclosure
    Fixed PenaltyPercentage-Based Penalty
    The fixed penalty applies to the first time usage of Voluntary Disclosure as well as every repeated time usage.

    • AED 3000/- will be charged if the taxpayer utilises the VAT voluntary disclosure form for the first time.
    • AED 5000/- is charged for every repetition of the VAT voluntary disclosure form.
     

    This fee will be charged in all cases when a taxpayer has revealed less than their actual tax due in their return and then utilises the VAT Voluntary Disclosure form to disclose the balance. The following percentage-based penalties will be applied to the outstanding amount:

    • If the taxable person makes a voluntary disclosure before the authority notifies them (via a tax audit or tax assessment), the penalty is 5% of the tax amount not declared earlier.
    • If the taxable person is notified of a tax audit, or if he makes a voluntary disclosure using a VAT voluntary disclosure form 211 during the audit, he will be obliged to pay 50% of the tax amount.
    • If a taxable person makes a voluntary disclosure after the authority has issued a tax audit notice, he must pay a penalty of 30% of the tax amount.

    Submission deadline for a VAT Voluntary Disclosure

    If the mistake or omissions are reflected in a computation of due tax that is less than the necessary amount by more than AED 10,000, the taxable person must make a voluntary disclosure inside 20 working days of becoming informed of the discrepancy. Businesses need to make sure that their VAT returns are filed in accordance with FTA regulations. This will reduce the need to use the VAT Voluntary Disclosure Form 211 to avert VAT financial penalties. All taxable businesses must file their VAT returns on schedule and precisely according to the FTA’s guidelines.

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