VAT Voluntary Disclosure (VD) in the UAE
Expert Guidance for VAT Compliance and Optimization
What is VAT Voluntary Disclosure?
VAT Voluntary Disclosure (VD) in the UAE allows businesses to correct errors or
omissions in previously submitted VAT returns. If a company discovers an overreporting or underreporting of tax, it can proactively disclose and rectify these inaccuracies to the Federal Tax Authority (FTA) before an audit detects them.
Key Aspects of VAT
Voluntary Disclosure
Time Limit: Voluntary Disclosures must be made within five years from the original filing date of the period in which the error occurred.
Purpose: Ensures VAT compliance, reduces penalties, and avoids legal risks.
Correction Process: Businesses must amend their VAT return and submit a revised declaration with the correct figures.
Penalty Reduction: Timely disclosures may help in reducing penalties, compared to errors found during an FTA audit.
Steps Involved in Filing a VAT Voluntary Disclosure
- Identify the Error – Determine the incorrect tax reporting in a previous VAT return.
- Prepare the Voluntary Disclosure – Submit a Voluntary Disclosure Form to the FTA, explaining the error and the correction.
- Pay the Correct Tax – If additional VAT is due, settle the outstanding amount.
- Maintain Records – Keep documentation for future reference or audits.
- Time Limits for VAT Voluntary Disclosure
| Error Amount (AED) | Action Required | Deadline |
|---|---|---|
| More than 10,000 | Submit a Voluntary Disclosure to the FTA | Within 20 business days from the date of awareness |
| 10,000 or less | Correct the error in the next VAT return (if applicable) OR submit a Voluntary Disclosure | By the due date of the next VAT return OR within 20 business days if no return is due |
New FTA Decision No. 8 of 2024 (Effective from 1 January 2025)
The FTA has outlined new guidelines for correcting errors and omissions in VAT returns:
- Misreporting Standard-Rated Supplies – Reporting taxable sales under the wrong Emirate.
- Incorrect Reporting of Zero-Rated Supplies – Understating or overstating zero-rated transactions.
- Incorrect Reporting of Exempt Supplies – Errors in reporting exempt transactions.
How Spectrum Can Assist You?
As a leading VAT consultancy firm in the UAE, Spectrum’s team of VAT experts can guide you through the Voluntary Disclosure process, ensuring full compliance with FTA regulations. Our services include:
- Transaction Review: In-depth analysis of VAT records and tax invoices.
- Compliance Check: Ensuring adherence to VAT laws and record-keeping requirements.
- Documentation & Filing: Assistance in preparing and submitting Voluntary Disclosure forms.
- Consultation & Advisory: Office visits or in-house discussions to clarify VAT law obligations.
Connect with us
Need help with VAT voluntary disclosure for your business? Whether you’re correcting errors in your previous VAT filings or ensuring full compliance, Spectrum provides expert guidance to manage the process efficiently and accurately.