The UAE is an economic success story for businesses around the globe. Right from the dynamic business environment to the lively geographical location – the environment offers opportunities for companies of all shapes and sizes to thrive. Over the years, to keep these business operations streamlined and in check, the UAE has introduced various policies and taxes, one of which is the Value Added Tax, VAT.
VAT is an extremely important component in the UAE’s taxation system. The presence of this tax enables businesses to contribute to the country’s economy.
In this article, we’ll dive into some of the important information around VAT payment schedules in UAE. Particularly, we will look at VAT payment last date, UAE VAT deadline, UAE tax payment schedule, and so on. As a business operating in the UAE in 2024, knowing about different aspects of VAT compliance in UAE is extremely important for you to ensure you keep maintaining a good reputation with the Federal Tax Authority (FTA).
By the end of this article, you’ll have properly understood what it means to be VAT compliant in UAE and what steps to take to get there!
Additionally, if you’re looking for professional help to streamline your VAT compliance UAE, Embee Nextgen are your perfect partners. With years of expertise coupled with domain knowledge, our team comes with professionals equipped to help you your business stay within UAE VAT deadlines and ensure utmost compliance! Reach out to us today.
Now, let’s begin with trying to understand Dubai VAT schedule and more!
What is VAT in the UAE? What is VAT return?
The VAT was introduced by the UAE in January 2018 as a way to expand its income sources beyond oil. Set at 5%, VAT applies to most goods and services. Businesses in the UAE must collect this tax and pay it to the Federal Tax Authority (FTA). How often a business files its VAT returns—whether quarterly or monthly—depends on its size and type.
In very simple terms, a VAT return is a document that summarizes all of your sales and purchases as a business during a tax period. The document is supposed to include all details of exports, imports, exempt supplies, and the VAT collected or paid on each transaction. As a business in the UAE, you must submit VAT returns once during each tax period – which can vary as prescribed by the Federal Tax Authority (FTA).
Key Dates for VAT Payment
You must adhere to UAE VAT deadlines to avoid getting penalized for misses or delays.
Generally, VAT payments are due within 28 days after the end of a tax period. Here are some important UAE VAT deadlines and key dates for you to keep in mind:
1. Quarterly
If you’re looking to do the UAE tax payment quarterly, you will be more or less following the calendar year. In that regard, the key UAE VAT deadline are the following:
- Q1 (January – March): April 28th.
- Q2 (April – June): July 28th.
- Q3 (July – September): October 28th.
- Q4 (October – December): January 28th of the following year.
2. Monthly
If you’re a business that deals with higher revenue or prefers a monthly tax payment mode, you have the monthly option. For filing VAT returns and making the payments, the UAE VAT deadline on a monthly basis is by 28th of each month following the taxable period.
So, if your taxable period comes to an end on 31st January, by 28th February is when you should look to fill your VAT returns and payments.
How to Ensure Compliance with VAT Deadlines
Here are some steps you can take to be within the UAE VAT deadlines and not miss the VAT tax schedule:
- Set prompt, timely, and detailed reminders and notifications to keep track of the UAE VAT deadlines. Be proactive while doing so as this can be the make or break for your relationship with the FTA!
- Work with professionals and expert consultants who can help you through the UAE tax schedule. As a business owner, managing your business and taking care of taxation can be overwhelming, so it’s reasonable (and extremely helpful) to look outside for help!
- Look for latest tools for accounting and managing taxes. Understanding how these tools work can help make the tax filing process easier and less overwhelming.
What Happens if You Miss a VAT Payment Deadline?
As a business operating in the UAE, VAT compliance is not optional. If you fail to meet the UAE VAT deadlines, you will be penalized by the Federal Tax Authority (FTA).
The penalty is AED 1,000 for the first time a business fails to submit its VAT return or make the payment on time. If you repeat the offense within 2 years, the penalty increases to AED 2,000.
Late VAT payment penalties may also include 2% of the unpaid tax, an additional 4% on the 7th day of delay, and 1% daily up to a maximum of 300%.
Conclusion
The UAE VAT tax schedule is quite complex. Additionally, fines and penalties are levied from businesses don’t comply. It goes without a doubt that UAE tax payment needs to be taken very seriously. You wouldn’t want to miss UAE VAT deadlines and end up being in the bad books of the FTA!
If the complexities surrounding VAT payments in Dubai feel stress you out, it’d be great to have a partner by your side. Reach out to Embee Nextgen for expert advice and dedicated experience on getting businesses up and running and helping them through everything – including taxation woes! Contact us today!
FAQs
1. When are VAT payments due in the UAE?
UAE VAT deadline generally falls within 28 days after the tax period ends. If you’re looking to file the returns quarterly, the UAE VAT deadline is April 28th, July 28th, October 28th, and January 28th. If you prefer filing it monthly, you must make your payments by the 28th of each month following the taxable period.
2. What happens if I miss the VAT payment deadline?
If you miss the important dates for VAT payment in the UAE, the Federal Tax Authority (FTA) imposes penalties. The first missed deadline results in a fine of AED 1,000. A second offense within 24 months increases the fine to AED 2,000. Additional penalties may include 2% of the unpaid tax initially, followed by 4% after seven days, and 1% daily until the tax is paid, up to a maximum of 300%.
3. How do I avoid missing VAT payment deadlines?
The first step towards having a healthy relationship with tax schedules is being organized and proper. Use calendar reminders, accounting software, seek professional help and partnership in the UAE to avoid missing UAE VAT deadlines.