Voluntary Disclosure
Correct your VAT errors seamlessly with our Voluntary Disclosure services. Stratify guides you through the process, ensuring compliance and minimizing potential penalties with the FTA.
Voluntary Disclosures for UAE VAT
A Voluntary Disclosure is a formal notification made by a taxable person to the Federal Tax Authority (FTA) in the UAE. It allows businesses to correct errors or omissions in their previously submitted VAT returns or other tax forms. This process is crucial for ensuring that the business remains compliant with tax regulations and avoids penalties for inaccurate or incomplete tax reporting.
A taxable person must submit a Voluntary Disclosure if they discover:
• An error or omission in a previously submitted VAT return that led to an incorrect tax liability.
• A mistake in tax calculations or declarations that resulted in an understatement or overstatement of payable VAT.
• Any other inaccuracies in filed tax forms that have financial implications.
Process of Submitting a Voluntary Disclosure
• Thresholds for Submission: A Voluntary Disclosure must be made when the payable VAT amount is either understated or overpaid by more than AED 10,000.
• For errors under AED 10,000, the discrepancy can typically be adjusted in the next VAT return, provided it is within the same tax period.
Identify Errors or Omissions
Conduct a thorough review of your previously submitted VAT returns or other tax forms to identify any errors or omissions.
Prepare the Corrected Information
Gather the necessary financial information and supporting documents to correct the error. The FTA requires detailed documentation to explain the nature of the mistake and the proposed correction.
Access the FTA Portal
Log in to the FTA’s online portal using your business’s credentials.
Submit the Voluntary Disclosure
Navigate to the relevant section for Voluntary Disclosures and provide the corrected details. Attach all supporting documents and evidence that justify the correction.
Review and Confirmation
After submitting, the FTA will review the disclosure. If the correction is accepted, the business may need to pay any additional tax due or adjust future returns.
Penalties
Penalties for errors corrected through Voluntary Disclosure vary, but businesses that act promptly to correct mistakes often face reduced penalties
Documents Required for Voluntary Disclosure
Original VAT Return
The initially filed VAT return or tax form where the error was made.
Supporting Documents
Any invoices, financial statements, or receipts that substantiate the changes being made.
Corrected Calculations
A detailed breakdown of how the VAT liability has been recalculated.
Explanation Letter
A document explaining the nature of the error or omission and how it occurred.
How Stratify Can Help
At Stratify, we simplify the Voluntary Disclosure process by offering:
Error Detection & Analysis
Our team conducts a thorough review of your VAT returns and other tax filings to identify potential errors or omissions that may require correction.
Comprehensive Documentation:
We ensure that all necessary documents, calculations, and explanations are prepared accurately and in accordance with FTA requirements.
Submission Support
Our experts assist in filing the Voluntary Disclosure through the FTA portal, ensuring the submission is correct and complete.
Penalty Mitigation
We work closely with you to minimize penalties by acting swiftly and ensuring the error is disclosed promptly.
Post-Submission Assistance
After submitting the Voluntary Disclosure, we provide ongoing support to address any follow-up inquiries or actions required by the FTA.
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Frequently Asked Questions
What is the penalty for not filing a Voluntary Disclosure?
Failing to submit a Voluntary Disclosure for a significant error can result in substantial penalties, ranging from fixed fines to a percentage of the unpaid tax amount. Timely submission often reduces these penalties.
Is there a deadline for filing a Voluntary Disclosure?
While there is no strict deadline, the sooner an error is corrected, the more likely you are to avoid higher penalties. The FTA encourages prompt action to maintain compliance.
Can I correct multiple errors in one Voluntary Disclosure?
Yes, multiple errors related to the same tax period can be addressed in a single Voluntary Disclosure. However, each error must be explained clearly.
Will I receive a refund if I overpaid VAT?
If a Voluntary Disclosure results in an overpayment, you may be entitled to a refund. The FTA will review the disclosure and issue a refund if appropriate.
How long does the FTA take to review a Voluntary Disclosure?
The review period varies, but the FTA typically provides feedback within 20 business days. Additional information or clarification may be requested during this time.
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Why Choose Stratify?
Expert Guidance: Our VAT specialists ensure your Voluntary Disclosure is accurate and compliant with UAE regulations.
Minimized Penalties: We help reduce penalties by identifying and correcting errors proactively.
Tailored Solutions: Customized VAT services are provided to meet your specific business needs.
For reliable support with Voluntary Disclosures or any VAT-related issues, contact Stratify today!
