Latest Rules for Fixing Errors in VAT Returns 🥇
You’ve got to stay sharp with VAT these days. Now, it’s not just about submitting on time, but also about getting every detail right. The Federal Tax Authority in the UAE has put out Decision No. 8 of 2024, which started on January 1, 2025. This new rule shows how businesses should correct any mistakes or omissions in their VAT returns.
Lately, a lot of businesses across the Emirates have updated their VAT returns. They did this either by choice or because of audits. Now, the process gives step-by-step instructions. Let’s see what these new guidelines mean and how you can avoid problems from honest mistakes.
Understanding What VAT Returns Really Mean
A VAT return is a report that a business submits to the Federal Tax Authority. The report shows how much VAT a company has collected from sales and how much it paid on purchases during a set period.
If you make an error or leave out information in your VAT return, you might get a warning, a penalty, or more checks from the FTA.
If a business doesn’t submit a Voluntary Disclosure within 20 days—like the FTA asks—even small mistakes can turn you into a non-compliant taxpayer in the UAE.
- VAT returns must be accurate and timely
- Omissions or errors can trigger financial penalties
- You have to disclose mistakes within 20 days—even if the tax owed doesn’t change
Stricter Rules for Reporting VAT Mistakes
Before this new decision, if a mistake was less than AED 10,000, most companies just fixed it on the next VAT return. But now, that’s changed. Even mistakes that don’t change your total VAT must be reported to the FTA. This means if you list sales in the wrong Emirate or mark something as zero-rated when it shouldn’t be, you need to tell the tax office.
- All mistakes, even non-financial ones, need to be reported
- Misreporting sales by Emirate must be disclosed
- Getting help from Mubarak Al Ketbi makes things easier for businesses
Correcting Errors That Don’t Affect Due Tax
Some mistakes don’t actually change how much tax you owe, but you still need to correct them. Here are the main errors that require voluntary disclosure:
- Reporting standard-rated products in the wrong Emirate
- Overstating or understating exempt supplies
- Overstating or understating zero-rated supplies
No matter the tax difference, you must report these errors to the FTA as soon as you spot them.
Making Corrections: What’s the Process?
Businesses must submit a Voluntary Disclosure within 20 working days of finding an error. The countdown starts the day you discover the mistake—not the day you made it.
- Use the EmaraTax portal for disclosures
- Find the affected tax return in the system
- Follow the steps in the portal to submit your correction
If you wait too long, you could face a penalty.
Keeping Good Records Is Key
It’s not enough just to fill out the form—you need proof. The FTA wants you to keep your documents in order for five years. This includes contracts, tax invoices, records by Emirate, and all basic accounting books. If you don’t have the right documents, your disclosure might not get accepted.
- Save all agreements and tax invoices
- Keep breakdowns of supply for each Emirate
- File all books and records properly
Proactive Steps to Stay Compliant
Lots of UAE companies now check their VAT returns every quarter instead of waiting for the year-end. It’s smart to audit your own records early. If you ever feel unsure about a mistake, get help from professionals like Mubarak Al Ketbi Chartered Accountants. Getting advice upfront can help you dodge penalties and keep your business out of hot water.
How Mubarak Al Ketbi Chartered Accountants Can Guide You
Mubarak Al Ketbi Chartered Accountants knows the ropes when it comes to VAT compliance. Our expert team can help you avoid mistakes and guide you with tax return corrections, so you don’t get caught between a rock and a hard place!
To get in touch or learn more:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud, Dubai – UAE
- Contact/WhatsApp: +971 50 276 2132
