UAE warns VAT payment deadline approaching

UAE businesses have been warned that the coming Monday is the final deadline to submit their tax returns for the period ending April 30.

In a statement, the Federal Tax Authority (FTA) said it had released new video tutorials explaining how to complete and submit returns.

Failure to submit returns and pay taxes by May 28 will result in penalties.

“The Authority is multiplying its efforts to ensure businesses and individuals all over the UAE know their rights, their obligations, and how to correctly implement the tax system,” said FTA director general Khalid Ali Al Bustani.

Last month the FTA said up to 75,000 firms face fines for failing to register for VAT.

The Federal Tax Authority (FTA) extended the first declaration period for filing value added tax returns for some companies in January due to concerns they were not yet ready to file returns. It has also extended a registration deadline from January until the end of April.

Read: Up to 75,000 UAE firms facing fines for failing to register for VAT

The 5 per cent tax rate came into force on January 1 and applies to most goods and services.

Read: Revealed: Goods and services subject to VAT in the UAE

However, the UAE government has recently opted to refund VAT to a number of businesses including those in the events and conference markets and wholesale traders of gold, jewellery and precious metals.

Read: UAE to refund VAT for conferences, events companies

The administrative penalty for late registration is Dhs20,000 ($5,445). Other fines include Dhs15,000 ($4,084) for failing to display prices inclusive of VAT, Dhs3,000 ($817) for a first incorrect tax filing and Dhs5,000 ($1,361) for incorrect filings thereafter.

Failure to submit a deregistration application will result in a fine of Dhs10,000 ($2,723). A first time tax offence will result in a Dhs1,000 ($272) fine and repeat offences within two years Dhs2,000 ($545).