Ways to Correct VAT Errors for VAT Returns in the UAE
Ways to Correct VAT Errors for VAT Returns in the UAE
Introduction
Every VAT-registered individual or business in the UAE must submit their VAT Return (Form 201) to the Federal Tax Authority (FTA) on time. However, mistakes can happen—whether in claiming input tax or calculating output VAT. The FTA allows corrections through Form 211 – Voluntary Disclosure, ensuring transparency and compliance. Learn more in our dedicated article: Correcting VAT Errors for VAT Returns in Dubai, UAE .
Understanding VAT Errors and the Correction Timeline
Businesses can correct VAT errors within five years of the original tax period—except in cases of tax evasion or failure to register, where the FTA may go back 15 years. Timely correction avoids audits and financial penalties.
Correcting VAT Errors: Based on Amount
- Errors ≤ AED 10,000: Can usually be corrected in the next VAT return. If the taxable person is no longer registered, a voluntary disclosure is required.
- Errors > AED 10,000: Must be reported to the FTA using Form 211 within 20 business days of discovery.
Correcting Errors on Tax Invoices
Common issues include incorrect VAT amounts or applying tax where none was due (e.g., zero-rated supplies). Solutions include:
- Issuing a credit note for overcharged VAT
- Issuing a revised invoice with the correct VAT
- Communicating with customers for necessary adjustments
Tax Refund Corrections
If a VAT refund application contains errors, businesses must submit a voluntary disclosure within 20 working days. If the error originates from the VAT return or assessment itself, follow the standard correction procedures for returns.
When and Why to Use Voluntary Disclosure (Form 211)
Voluntary disclosure helps maintain tax compliance and avoid penalties. This form must be used when:
- The error exceeds AED 10,000
- The error cannot be fixed through a new return (e.g., de-registered businesses)
- FTA guidelines require formal disclosure
Why Choose Unicorn Global Solutions
Filing accurate VAT Returns within 28 days of the tax period is mandatory under UAE VAT Law. Avoid unnecessary disclosures and penalties with the help of professionals.
Unicorn Global Solutions specializes in:
- Identifying and correcting VAT errors
- Preparing and submitting Voluntary Disclosures (Form 211)
- Ensuring compliance with UAE VAT Law
- Assisting with VAT audits and refund reviews
Get in touch: Text us on WhatsApp or call us for expert VAT support.
.jpg)
This is a highly valuable and practical guide—correcting VAT errors is a critical aspect of maintaining compliance under UAE tax regulations. Whether it's an input/output VAT mismatch, omitted transactions, or incorrect tax calculations, timely correction is essential to avoid penalties and maintain good standing with the FTA. It's great to see the process clearly outlined, including the use of Voluntary Disclosure and understanding thresholds. Businesses should also consider working with experienced VAT consultants in UAE to ensure accuracy and reduce risk, especially as VAT audits become more stringent. Thanks for sharing such actionable insights—this will be extremely helpful for finance teams and business owners alike!
ReplyDelete