Correcting VAT Errors

VAT errors are bound to happen. No matter how vigilant one can be, there could be circumstances where there would be some missing tax invoices, wrong VAT calculation, invalid input VAT claims etc. Whenever as a taxable person you become aware of any such error, it is mandatory to correct the errors accordingly.

How to Correct UAE VAT Errors

There are two recourses available to correct VAT errors. Both the options are as per the guidelines issued by UAE’s Federal Tax Authority. They are:

  1. Submit a Voluntary Disclosure
  2. Correct the Error via VAT Return

Both the above options available depends on the quantum of the error amount.

When to Submit a Voluntary Disclosure

You MUST Submit the Voluntary Disclosure if You May Submit the Voluntary Disclosure if
Incorrect Reporting of Tax Payable Amount & Tax Payable is underpaid by more than AED 10,000 Tax Payable is reported more in the Tax Return
Excess Tax Refund applied Tax Refund application requested less refund than it should be

Please note that you are not required to submit a Voluntary Disclosure for the underpaid tax if the amount of the Payable Tax is not more than AED 10,000 as long as the person is able to correct the error in the Tax Return for the tax period in which the error has been discovered.

When to Correct the VAT Error via VAT Return

You can correct error via next VAT Return, where voluntary disclosure is not required. In simplicity what it means that if the due to the VAT error the tax payable amount was underpaid by less than AED 10,000 you can correct such error in the tax return of the period in which the error is identified.

How Lynchpin Can Assist you in your VAT Health Check Review

Our dedicated VAT experts can scrutinize your VAT related transaction to ensure that your accounting records in full compliance with UAE VAT Laws. We are proud to have the best VAT team in town at your disposal. Contact us today at +971-4-4370704.