FTA has extended due date for VAT Return in the UAE – update in 2020


There has been the latest update on the due date of VAT return in the UAE which came from Federal Tax Authority of the UAE. Taxpayers have been expecting an extension of due date for VAT Return and also the extension of due date for VAT payment. 


Keeping in mind the global crisis caused by COVID-19, the FTA in the UAE has taken some unprecedented measures to ensure the proliferation of business all across the country without any hindrance or minimal obstruction. In April 2020, the FTA has come up with a decision and implementation of the extension of VAT Return Filing due date for 31st March 2020 that is the financial year ending. The extension has taken effect in May 2020 which covers the due date for VAT return and also the due date for VAT payment. 


The due date for VAT return filing in the UAE has been 28th of every month. The due date for those registered under VAT had to file quarterly return on 28th April 2020. After the new announcements of extension of the due date for VAT payment and VAT return filing, both categories of businesses are going to benefit. 


Effect on Penalty for non-filing


This decision of the FTA has been aimed at helping the business community to cope up with the difficulty in cash flow caused by the economic lockdown on account of the pandemic of COVID-19. 


If you are a tax registrant, for whom originally due date was on or before 28th of April 2020, you can file your return by May 2020 without incurring any penalty caused by non-filing of return and non-payment of VAT. The amount of fine for a non-filing is AED 1000 for the first time and AED 2000 for subsequent non-filing or recurrence. Due to the extraordinary crisis brought in by the COVID crisis, the FTA has extended the due date for VAT return which would not attract any penalty for non-filing in due time. For the financial year ended March 31st 2020, the registrant can file the tax return until the 28th of May without any penalty. 


Process of filing tax returns for the period of the extension:


If you are a registrant subject to monthly tax return filing, you need to file two separate returns before the 28th of May 2020. Out of these two separate returns, one tax return pertains to the tax period ending 31st March 2020 and other for the period ending 30th April 2020. You are supposed to submit the data for each month while filing your returns. The figures cannot be consolidated in one return. The extension relate only to the period of filing of returns. It doesn’t apply to any procedure of filing a return.


If there is a delay in paying VAT liability for one month, it would have attracted a penalty of 6%. This new ruling of extension of return has been made to reduce the tax burden on the taxpayers and to give them enough time to manage and analyze cash flows of their businesses. 


GCC Filings provide services in company incorporation in the UAE. It also provides accountancy services to its clients. It provides tax auditing services also to the business community. It helps in filing tax returns, VAT return filing and VAT payment including VAT registration. 

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