Important Guidelines for Correcting Errors or Omission in VAT Returns
The UAE FTA issued Decision No.8 of 2024 which outlines the Mechanism for correction of error or omission in the tax return submitted for VAT in UAE (effective from 1 January 2025). The taxpayers shall follow this guidance which is designed to address discrepancies in VAT return submission i.e to correct specific errors in the VAT Return filing process, while the due tax remains unchanged.
Let us uncover the key provisions of the decision and implications for taxpayers in for VAT compliance
Key Provisions of The Decision for Correction of Errors or Omissions in VAT Return Filing
- If a taxpayer discovers any error in VAT return submitted under Federal Decree Law No. 8 of 2017 (VAT) that does not impact the due tax shall correct the errors by filing a voluntary disclosure. This will be applied to circumstances where:
- The identified errors fall under the specific cases outlined in Article 2 of the decision and the correction does not change the tax due.
- This decision encourages taxpayers to volunteer and make their VAT filing accurate.
The decision considers the following instances as cases to correct errors or omissions that does not impact the tax due:
Misreporting Supplies Across Emirates
The taxable supplies mistakenly reported under different Emirate’s jurisdiction (I.e the taxable supplies meant for one emirate but submitted to another emirate ) shall be corrected.
For Example: Reporting Abu Dhabi supplies in VAT return under Dubai
Misreporting of Zero-rated Supplies
If there are errors in zero-rated taxable supplies, including overstatement or understatement of the values of taxable supplies, shall be corrected.
Export of goods and services, international transportation will be considered as zero-rated supplies.
Incorrect Reporting of Exempted Supplies
The overstatement or understatement of exempted supplies can also be corrected under this decision.
Though exempted supplies are not subject to VAT but still need accurate reporting according to this decision to ensure non-materials errors are rectified in the reporting, hence promoting accuracy and transparency in regulatory compliance.
Implications for Taxpayers in VAT Filing
This decision facilitates a streamlined procedure for rectifying certain errors and omissions in VAT return filing, strengthening the FTA’s allegiance to compliance and clarity.
Through this decision, taxpayers will be encouraged to:
- Review their VAT returns reported to authorities to identify and rectify any discrepancies.
- Have an obvious conclusion on whether the error or omission impact the due tax.
- Take advantage of the Voluntary disclosure processes to correct eligible errors instantly.
Note: This decision coincides with the Article 10 of the Amended Tax Procedures Law
File Your VAT Return with Smart Actionable Strategy:
Review VAT Returns: Identify and evaluate the errors or omissions that are eligible for corrections
Understand The Decision: File voluntary disclosure to ensure seamless correction of errors
Maintain Proper Documentation: collect all the records that support your corrections.
Train Your Staff: Notify your staff with the latest regulatory updates
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