VAT Filing: Accuracy a Big Concern
Around 50% of the UAE SMEs faced challenges in VAT filing. As the deadline just passed for April filing, it emerges that most of them were not sure about the return filing procedures and importance of accuracy while filing the return. This happened as most of them were filing VAT for the first time.
Most of the companies who were trying to file returns at the last minute were also very weak in documentation: a Khaleej Times report noted quoting leading tax consultants in the Kingdom.
Last Minute Rush for VAT Filing
According to Naveen Sharma, Chairman, ICAI Dubai, there were a number of companies who hurried only in the last minute for filing VAT returns. Moreover, most businesses have completed registration and have started issuing tax invoices; but they are very weak in documentation.
If filings from companies are not accurate from day one, then they will be in trouble within 6 months, he added
Improper VAT Invoices a Big Issue
The biggest issue is that many suppliers’ invoices are improper. Mayank Sawhney, Director of MaxGrowth Consulting said, as quoted in Khaleej Times, “Most of the suppliers’ invoices are coming without their proper names, addresses and TRNs [tax registration numbers], which will create problems for companies to claim input tax on that. Because their systems are not proper, they have not done the right treatment of certain transactions.”
Even when companies have filed their return on time, due to inaccuracies they will be asked for further details by the FTA [Federal Tax Authority] on a later date. This will create issues for them. The companies might be under the impression that that they have filed it correctly but the FTA will ask for audit files and other specific data. From there, they could potentially be exposed to financial penalties.
So, it is important to be very careful while filing VAT returns. If you are not sure about filing VAT correctly, it is better to take help from external experts and get them right from the first month onwards.
If you have any doubt during this process call us 04 443 1604