Correcting Non-Tax Omissions in VAT Returns: FTA’s Latest Directive

Correcting VAT Return Omissions

The Federal Tax Authority has introduced Decision No. 8 of 2024, outlining the mechanism for correcting errors or omissions in VAT tax returns. This decision, issued on November 1, 2024, and effective from January 1, 2025, is designed to provide clear guidelines for taxpayers in addressing discrepancies in their submitted tax returns where no difference in due tax arises. Below, we unpack the key provisions of this decision and its implications for VAT compliance in the UAE.  

Scope of Error or Omission

The decision identifies the following scenarios as cases of error or omission where no difference in due tax exists: 

  • Misreporting Supplies Between Emirates: Reporting standard-rated taxable supplies under an incorrect Emirate’s jurisdiction. 
  • Incorrect Reporting of Zero-Rated Supplies and Exempt Supplies: This includes both understatement and overstatement of Zero-rated supplies and Exempt Supplies. 

The decision emphasizes submitting a Voluntary Disclosure to correct such errors, ensuring transparency and maintaining accurate tax records. 

Implications for Taxpayers

This decision provides a streamlined process for Correcting VAT Return Omissions and addressing certain types of errors in VAT returns, reinforcing the FTA’s commitment to clarity and compliance. Taxpayers are encouraged to:

  • Review their submitted VAT returns for any discrepancies.
  • Understand the specified cases of error or omission.
  • Utilize the Voluntary Disclosure process to rectify eligible errors promptly.

For professional support in ensuring VAT compliance and navigating the complexities of FTA regulations, trust RVG Chartered Accountants to provide personalized guidance and efficient tax solutions tailored to your needs.

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