Filing a VAT return is a crucial part of running a business in the UAE, but it doesn’t have to feel overwhelming. Whether you’re filing for the first time or looking to streamline your process, understanding the basics can save you from costly mistakes and penalties.

 The UAE’s VAT system is relatively straightforward once you know what to expect, and with the right approach, you can handle your tax obligations with confidence. In this comprehensive guide, we’ll walk you through everything from deadlines and filing procedures to common mistakes and how to avoid them, so keep reading to master your VAT return responsibilities.

What is a VAT Return in UAE?

A VAT return is essentially a report you submit to the Federal Tax Authority (FTA) that shows how much VAT you’ve collected from customers and how much VAT you’ve paid on business expenses. Think of it as a summary of all your VAT transactions during a specific period, usually three months (quarterly) or one month (monthly), depending on your business size.

The UAE introduced VAT in January 2018 at a standard rate of 5%, which is relatively low compared to many other countries. Every VAT-registered business must file regular returns to stay compliant with UAE tax law.

Who Needs to File a VAT Return in UAE?

Not every business in the UAE needs to worry about VAT returns. The requirement depends on your annual revenue and whether you’ve registered for VAT.

Businesses required to file VAT returns include:

✅ Companies with annual taxable supplies exceeding AED 375,000 (mandatory registration threshold)

 ✅Businesses that voluntarily registered with revenue between AED 187,500 and AED 375,000

✅ Free zone businesses operating in both designated and non-designated zones

✅ Companies importing goods into the UAE above certain thresholds

Once you’re registered (whether mandatory or voluntary), filing VAT returns becomes your legal obligation. Many businesses choose to register voluntarily because it allows them to reclaim VAT on their expenses, which can improve cash flow.

📚 Also read: VAT Registration Process in UAE | 2025 Step-by-Step Guide

Understanding VAT Return Filing Periods in UAE

Your VAT return filing frequency in the UAE depends on how much revenue your business generates annually. Most businesses file quarterly VAT returns, which means every three months.

Here’s how filing periods are determined:

✅ Quarterly filing: For businesses with annual revenue below AED 150 million (most common)

✅ Monthly filing: For businesses with annual revenue exceeding AED 150 million

✅ First tax period: May be shorter or longer, depending on your registration date

✅ Period changes: Your filing frequency can change as your business grows

This shorter filing period for larger businesses helps the government monitor companies more closely and ensures a steady flow of tax revenue. When you first register for VAT, the FTA assigns you a filing frequency based on your expected revenue.

VAT Return Deadlines in UAE: When You Must File

Timing is everything when it comes to VAT returns in the UAE. The standard deadline for submitting your VAT return is 28 days after the end of your tax period.

Key deadline information:

✅ Standard deadline: 28 days after the tax period ends

✅ Example: Tax period ending March 31st requires filing by April 28th

✅ Weekend/holiday adjustments: Deadline extends to next working day

✅ Payment due date: Same as filing deadline (no grace period)

✅ Quarterly deadlines: 28 days after March 31, June 30, September 30, and December 31

Missing this deadline can result in penalties, so it’s crucial to mark these dates on your calendar. The FTA operates on a clear schedule, and there’s little room for excuses. It’s always safer to file early rather than wait until the last minute.

How to File Your VAT Return in UAE: The Complete Process

Filing your VAT return might seem daunting at first, but once you understand the steps, it becomes routine. The entire process happens online through the FTA’s eServices portal, which is actually quite user-friendly once you get the hang of it.

Preparing Your VAT Return Documents

Before you even log into the FTA portal, you need to gather your records. This includes all sales invoices you’ve issued, purchase invoices from suppliers, credit notes, debit notes, and any import or export documents.

Essential documents to prepare:

✅ All sales invoices issued during the tax period

✅ Purchase invoices and receipts from suppliers

✅ Credit notes and debit notes issued or received

✅ Import and export documentation

✅ Bank statements showing VAT-related transactions

✅ Records of zero-rated and exempt supplies

You’ll need to calculate your total sales (output VAT) and total purchases (input VAT). The difference between these two figures determines whether you owe money to the FTA or if you’re entitled to a refund. Make sure you separate transactions by VAT category: standard-rated (5%), zero-rated (0%), and exempt supplies.

Accessing the FTA eServices Portal

To file your VAT return, log into the FTA eServices portal using your credentials. If you haven’t set up an account yet, you’ll need your Tax Registration Number (TRN) to create one.

Portal access steps:

✅ Visit the FTA eServices website

✅ Log in using your TRN and password

✅ Navigate to the dashboard showing your tax obligations

✅ Select the current tax period for filing

✅ Review any notifications or updates from the FTA

The portal dashboard shows all your tax obligations, upcoming deadlines, and payment history. The system is designed to guide you through each box of the return form step by step.

Filling Out Your VAT Return Form

The UAE VAT return form contains 15 boxes that need to be completed accurately. Don’t worry, it’s not as complicated as it sounds. Each box asks for specific information about your business transactions.

Sales section (Boxes 1-6):

• Box 1: Standard-rated sales at 5%
• Box 2: Sales to VAT-registered businesses in other GCC countries
• Box 3: Zero-rated sales (exports, international transport, etc.)
• Box 4: Exempt sales (financial services, residential property)
• Box 5: Goods imported into UAE
• Box 6: Adjustments to sales (corrections from previous periods)

Purchases section (Boxes 7-12):

• Box 7: Standard-rated expenses at 5%
• Box 8: Purchases from VAT-registered suppliers in other GCC countries
• Box 9: Zero-rated expenses
• Box 10: Exempt expenses
• Box 11: Goods imported while not registered for VAT
• Box 12: Adjustments to expenses

Calculation section (Boxes 13-15):

• Box 13: Total VAT due (calculated automatically)
• Box 14: Total VAT credit (calculated automatically)
• Box 15: Net amount payable or refundable (the final figure)

📚 Also read: How to File VAT Return in UAE: Step by Step in FTA Portal

Submitting Your VAT Return

After filling in all the boxes and reviewing your entries carefully, submit the return electronically. The FTA system generates a confirmation receipt that you should save for your records. This receipt includes a unique reference number that proves you filed on time.

Many businesses work with professional accountants or bookkeepers to ensure accuracy in their VAT returns. Firms like Outsource Prime Accountants and Bookkeepers (OPAB) specialize in helping UAE businesses navigate VAT compliance, reducing the risk of errors that could trigger penalties or audits.

Making VAT Payments in UAE

Filing your return is only half the job. If your VAT return shows that you owe money to the FTA, you must make the payment by the same deadline (28 days after the tax period ends).

Payment methods accepted by the FTA:

✅ Bank transfers through UAE banks

✅ eDirectham payment system

✅ Online payment via the FTA portal

✅ Direct debit arrangements (for eligible businesses)

Important payment tips:

• Always use the correct payment reference number provided by the FTA
• Ensure payment is received by the FTA, not just initiated, before the deadline
• Keep confirmation receipts for all payments
• Allow extra time for bank processing (don’t wait until the last day)

When making a payment, always use the correct payment reference number. This ensures your payment is allocated to the right tax period and account. If your return shows that you’re entitled to a refund, the FTA will process it according to their standard timeline, though this can take several weeks depending on the amount and complexity of your claim.

What Happens If You Don’t Submit a VAT Return in UAE?

The FTA takes VAT compliance seriously, and there are real consequences for missing deadlines. Late filing penalties start at AED 1,000 for your first offense.

Late filing penalties:

• First offense: AED 1,000 fine
• Second offense within 24 months: AED 2,000 fine
• Continued non-compliance: Daily penalties that accumulate
• Penalty cap: Can reach significant amounts if ignored long enough

Late payment penalties (separate from filing):

• Immediately after the deadline: 2% of the unpaid tax applied right away
• After 7 days from the deadline: Additional 4% penalty if tax remains unpaid
• One month after the deadline: Additional 1% daily penalty on the outstanding amount
• Maximum penalty: Capped at 300% of the original tax amount

These penalties can add up fast and seriously hurt your business finances. Beyond the monetary cost, repeated violations can damage your business reputation and may trigger FTA audits or investigations. It’s always better to file and pay on time, even if you need to arrange payment plans with the FTA for financial difficulties.

Common VAT Return Mistakes to Avoid

Even experienced business owners make mistakes on their VAT returns. One of the most common errors is misclassifying transactions. Not all sales are taxed the same way, and confusing zero-rated supplies with exempt supplies can throw off your entire return.

Common errors to watch out for:

✅ Misclassifying zero-rated vs. exempt supplies

✅ Forgetting to claim eligible input VAT on business expenses

✅ Claiming VAT on non-eligible expenses (personal items, entertainment)

✅ Mathematical calculation errors

✅ Currency conversion mistakes on international transactions

✅ Using incorrect exchange rates (must use UAE Central Bank rates)

✅ Entering figures in wrong boxes on the return form

✅ Not adjusting for credit notes or returns properly

Another frequent mistake is forgetting to claim input VAT on legitimate business expenses. Many businesses leave money on the table by not tracking all their VATable purchases. On the flip side, some businesses try to claim VAT on expenses that aren’t eligible, which can trigger audits.

Correcting Errors on Your UAE VAT Return

If you discover a mistake after submitting your VAT return, don’t panic. The FTA allows voluntary corrections, and it’s always better to report errors yourself than to have them discovered during an audit.

Error correction options:

✅ Small errors (under AED 10,000): Can be adjusted in your next VAT return

✅ Large errors (over AED 10,000): Require an amended return submission

✅ Voluntary disclosure: Often results in reduced or waived penalties

✅ Time limits: Corrections should be made as soon as errors are discovered

The key is to act quickly once you notice the error. Voluntary disclosure often results in reduced or waived penalties, while hiding mistakes can lead to much harsher consequences.

Record Keeping Requirements for UAE VAT Returns

The FTA requires all VAT-registered businesses to keep detailed records for at least five years. This includes sales invoices, purchase invoices, credit notes, import/export documents, bank statements, and any other documents that support the figures in your VAT returns.

Essential records to maintain:

✅ Sales invoices with all required information

✅ Purchase invoices and receipts

✅ Credit notes and debit notes

✅ Import and export documentation

✅ Bank statements and payment records

✅ VAT return submissions and confirmations

✅ Correspondence with the FTA

✅ Accounting books and ledgers

Storage requirements:

• Minimum retention period: 5 years
• Can be stored electronically or in paper format
• Must be readily accessible for FTA audits
• Cloud-based storage is acceptable and recommended

These records can be kept electronically or in paper format, though digital storage is becoming the norm. Cloud-based accounting software makes it easier to organize and retrieve these documents when needed. During an FTA audit, you must be able to produce these records quickly, so having a well-organized system is essential.

📚 Also read: E-invoicing to be Implemented Next Year, 2026

Best Accounting Software for UAE VAT Returns

Managing VAT returns becomes much easier with the right accounting software. Several platforms are designed specifically for UAE businesses and integrate directly with the FTA portal.

Popular accounting software for UAE VAT:

✅ Zoho Books UAE edition: Cloud-based with FTA integration

✅ QuickBooks Middle East: Comprehensive features for small to medium businesses

✅ Odoo: Customizable ERP system with VAT modules

✅ Tally Solutions: Popular choice for UAE businesses

✅ Xero: User-friendly interface with UAE VAT settings

Key features to look for:

• Automatic VAT calculation on transactions
• VAT-compliant invoice generation
• Input and output VAT tracking
• One-click VAT return preparation
• Direct submission to FTA portal
• Multi-currency support with automatic exchange rates
• Detailed VAT reports and analytics

These systems automatically calculate VAT on transactions, generate VAT-compliant invoices, track input and output VAT, and even prepare your VAT return with just a few clicks. Businesses working with OPAB often get help implementing and optimizing these software solutions to ensure smooth VAT compliance.

📚 Also Read: Best Accounting Software UAE 2025: Tools for Businesses

Working with Tax Professionals for VAT Returns

While it’s possible to file VAT returns yourself, many businesses find value in working with registered tax agents or accounting firms. Professional accountants understand the nuances of UAE tax law, stay updated on regulatory changes, and can spot potential issues before they become problems.

Benefits of professional VAT services:

✅ Expert knowledge of UAE tax regulations

✅ Reduced risk of errors and penalties

✅ Time savings for business owners

✅ Optimized VAT refund claims

✅ Representation during FTA audits

✅ Handling complex scenarios (deregistration, amendments)

✅ Peace of mind and compliance assurance

The cost of professional VAT services varies depending on your business size and complexity, but the investment often pays for itself through avoided penalties, optimized refund claims, and peace of mind. Tax professionals can also represent your business during FTA audits and handle complex scenarios like deregistration or voluntary disclosures.

Conclusion

Filing VAT returns in the UAE doesn’t have to be stressful. With proper preparation, accurate record-keeping, and attention to deadlines, you can stay compliant and avoid penalties. Understanding the process, from gathering documents to submitting through the FTA portal, puts you in control of your tax obligations. Remember that VAT compliance is an ongoing responsibility. Each tax period brings a new filing deadline, and staying organized throughout the year makes the process much smoother. 

If you need expert support for setting up accounting software or ensuring smooth compliance with tax and accounting requirements, consider reaching out to Outsource Prime Accountants and Bookkeepers (OPAB). OPAB works with businesses across Dubai and the UAE to implement and optimize software like Odoo, Zoho Books, and QuickBooks, ensuring clarity and compliance. Their team understands the specific challenges UAE businesses face with VAT returns and can provide tailored solutions that fit your business size and industry. Contact OPAB today for guidance that keeps your business compliant, organized, and ready for growth.

FAQs About VAT Returns in UAE

When is the VAT return filing deadline in UAE?

The deadline is 28 days after your tax period ends, so quarterly filers must submit by 28 days after March 31st, June 30th, September 30th, and December 31st. 

How much is the fine for late VAT return in UAE?

The penalty for late filing is AED 1,000 for the first offense and AED 2,000 for subsequent violations within 24 months. Late payment carries additional penalties: 2% applied immediately after the deadline, 4% if unpaid after 7 days, and 1% daily starting one month after the deadline.

What is the difference between zero-rated and exempt supplies?

Zero-rated supplies are taxable at 0% VAT, allowing you to reclaim input VAT on related expenses. Exempt supplies have no VAT charged and you cannot reclaim input VAT on related costs.

Can I claim a VAT refund in UAE?

Yes, if your input VAT exceeds your output VAT, you can claim a refund through your regular VAT return, which commonly happens for export businesses or during periods of significant capital investment. 

Do I need to file a VAT return if I had no business activity during the tax period?

Yes, you must still file a “nil return” by entering zeros in all relevant boxes and submitting by the deadline. Failing to file a nil return will result in penalties just as if you had missed filing a regular return.