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Voluntary Disclosure

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published a new Voluntary Disclosure User Guide. This follows the implementation of the voluntary disclosure feature on the FTA’s eServices portal in June. The guide provides an overview of the process of completing the voluntary disclosure form for Value Added Tax (VAT) and Excise Tax, and submitting it to the FTA. This Guide deals primarily with the situation where there is a ‘one-off’ error in a VAT Return. As errors requiring consideration of whether to undertake a Voluntary Disclosure can take a variety of forms, it may well be worth-while obtaining professional advice prior to making any Voluntary Disclosures, so that the potential flow on consequences can be considered and addressed.

Voluntary

Disclosure

A voluntary disclosure should be made by a taxable person to notify the FTA of an error or omission in their tax return, tax assessment, or tax refund application. As per Article 8 of Cabinet Decision No. 36 of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures, voluntary disclosures are required to be made in the following cases:

  • where a filed Tax Return or a Tax Assessment is incorrect resulting in a calculation of the Payable Tax being less than required i.e. an underpayment of tax due, in an amount of more than AED 10,000;
  • where a filed Tax Return or a Tax Assessment is incorrect resulting in a calculation of the Payable Tax being less than required i.e. an underpayment of tax due, by not more than AED 10,000 and there is no Tax Return through which the error can be corrected; or
  • where a filed Tax Refund Application is incorrect, resulting in a calculation of a refund to which the Taxpayer is entitled being more than the correct amount, unless the error was a result of an incorrect Tax Return or Tax Assessment.

The voluntary disclosure must be made within 20 business days of discovering the error or penalties may apply.

To submit a voluntary disclosure against a VAT return that has already been submitted to the FTA, the taxable person should go to the VAT201 – VAT Returns tab in the VAT section of the eServices portal and click on the Submit Voluntary Disclosure button in the row of the relevant VAT return for which the voluntary disclosure is to be made. Our team of experts helps client in filling voluntary disclosure in compliance with UAE VAT law and regulations.

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