Following the introduction of corporate tax regulations in the UAE, businesses now have further responsibilities to ensure compliance. Not only is timely and accurate tax return filing required by law, but it also helps keep your business’s finances organized and prevents needless fines. Despite the procedure’s apparent simplicity, many organizations nonetheless commit expensive mistakes that could have been avoided. Regardless of the size of your business, knowing what not to do is just as important as knowing what to do.
Let’s concentrate on the most common mistakes made when Tax Return Filing UAE and provide helpful advice to help you steer clear of them.
1. Missing Filing Deadlines
One of the most common mistakes made by businesses is failing to keep track of the deadlines for filing taxes. The Federal Tax Authority (FTA) enforces rigorous filing deadlines, and disobedience can result in fines and legal action. Always plan and mark your calendar to prevent this. Give your finance staff enough time to prepare and go over the necessary paperwork by setting internal deadlines a few days before the real due date.
2. Giving False or Insufficient Information
The FTA may grow suspicious if you make even minor errors on your tax return. Inaccurate data, missed invoice information, or misreported transactions can all lead to penalties or audits. Before submitting, ensure that all of the information is correct. To ensure accuracy and completeness, carefully balance your books, examine invoice information, and double-check with supporting documentation.
3. Inaccurately classifying supplies
Ignoring the difference between standard-rated, zero-rated, and exempt supplies is another common mistake. Discrepancies may result from this misclassification’s effect on the computation of payable or recoverable tax. To properly report their goods and services, businesses need to understand their nature. Your accounting staff can benefit from regular training and updates on classification regulations.
4. Overlooking Input Tax Eligibility
Claiming VAT on non-recoverable expenses is a subtle yet serious issue. The FTA specifies exactly what is eligible for input VAT recovery. You risk punishment if you claim something that isn’t permitted, including personal expenses or specific entertainment prices. Before submitting any input tax claims, make sure to study the most recent regulations or seek advice from tax experts.
5. Not reconciling financial statements with VAT returns
Your financial accounts and your tax return must match. Absence of reconciliation may be a sign of deliberate misreporting or subpar accounting procedures, both of which may draw regulatory attention. Create a procedure that thoroughly examines financial information before using it to file taxes. Maintaining accuracy can be aided by routine internal audits.
Summary
Accurate tax filing in the UAE requires meticulous attention to detail, current regulatory understanding, and strategic planning. By avoiding these typical errors, you protect your company from fines and gain the favor of regulatory bodies. Our team of tax professionals at DgTx is dedicated to assisting companies in streamlining their operations and adhering to changing tax laws. Whether it’s tax return filing UAE or overall UAE tax filing, we’re here to ensure it’s done right the first time.
