VAT Voluntary Disclosure
The Federal Tax Authority (FTA) gives a VAT Voluntary Disclosure form for businesses to inform the FTA about the changes or errors in the VAT Returns or Refund. The VAT Form 211 for Voluntary Disclosure is highly helpful in rectifying the errors made while submitting VAT returns or during the application of VAT refund within 20 days from the date you were alert of the error.
In the case of Voluntary Disclosure, two different types of penalties are levied depending on the situations
- Fixed Penalty for Voluntary Disclosure – applicable for the first time as well as repeated users of VAT voluntary disclosure
- Percentage-Based Penalty for Voluntary Disclosure – applicable when an amount is unpaid to the Authority and it may range from 5% to 50% as per the conditions
When a taxable person or business should not submit a VAT form 211 to FTA?
A Voluntary Disclosure shouldn’t be submitted for the underpaid tax if and only if the amount of the Payable Tax is not more than AED 10,000. Also, the person can correct the error in the Tax Return for the tax period in which the mistake has been detected.
When a VAT Voluntary Disclosure Form should be submitted?
A taxpayer can submit a VAT voluntary disclosure form in cases where they become aware of an error in a VAT Return, VAT Refund application, or VAT returns. The scenarios are as follows
- If a VAT Return submitted to the FTA or a VAT Assessment sent to you by the FTA is found to be incorrect such that a Payable Tax less than the actual is calculated, a VAT Voluntary Disclosure is a need.
- If a VAT Return submitted to the FTA or a VAT Assessment sent to you by the FTA is found to be incorrect such that a Payable Tax more than the actual is calculated, you have to submit a VAT Voluntary Disclosure.
- If a VAT Refund application submitted from your end to the FTA is incorrect such that it resulted in calculating the refund amount to be more than the actual, you must submit a Voluntary Disclosure
- If a VAT Refund application submitted from your end to the FTA is incorrect such that it resulted in calculating the refund amount to be less than the actual, you must submit a Voluntary Disclosure
Standard Auditing is one of the approved Tax Agents by FTA and we will assist you with VAT Voluntary disclosure services in the UAE