Detailed Guidance on Voluntary Disclosure – VAT & Excise Tax

FTA has released a detailed guidance note on Voluntary disclosure by addressing the questions like when should a tax registrant submit a voluntary disclosure, what are the details that are required to submit a voluntary disclosure, what are the forms that are relevant for submission of a voluntary disclosure, how to understand the status of the voluntary disclosure that has been already submitted and so on.

 

Below is the extract of few important points relating to Voluntary disclosure based on the guidance released by FTA.

 

What is a Voluntary Disclosure

A Voluntary Disclosure is a form provided by the Federal Tax Authority (“FTA”) pursuant to which the Taxpayer notifies the FTA of an error or omission in a Tax Return, Tax Assessment or Tax Refund application.

 

When should you submit a Voluntary Disclosure Form?

In line with the relevant legal provisions, there would be specific scenarios where a Voluntary Disclosure Form should or can be used by taxpayers and submitted to the FTA. This would, in general, be in cases where a taxpayer becomes aware of an error or omission in a Tax Return, Tax Assessment or Tax Refund application, as below:

 

• If you become aware that a Tax Return submitted by you to the FTA or a Tax Assessment sent to you by the FTA is incorrect, which resulted in a calculation of the Payable Tax according to the Tax Law being less than it should have been, you must submit a Voluntary Disclosure to correct such error.

Please note that you are not required to submit a Voluntary Disclosure for the underpaid tax if the amount of the Payable Tax is not more than AED 10,000 as long as the person is able to correct the error in the Tax Return for the tax period in which the error has been discovered.

• If you become aware that a Tax refund application that you have submitted to the FTA is incorrect, which resulted in calculating the refund amount to which you are entitled according to the Tax Law, being more than it should have been, you must submit a Voluntary Disclosure to correct such error.

 

• If you become aware that a Tax Return submitted by you to the FTA or a Tax Assessment sent to you by the FTA is incorrect, which resulted in a calculation of the Payable Tax according to the Tax Law being more than it should have been, you may submit a Voluntary Disclosure to correct such error.

 

• If you become aware that a Tax refund application that you have submitted to the FTA is incorrect, which resulted in calculating the refund amount to which you are entitled according to the Tax Law, being less than it should have been, you may submit a

 

Time Limits for Voluntary Disclosures

If an error(s) resulted in a calculation of the Payable Tax being less than required by…	…the Person shall…	…before…
more than 10,000 Dirhams	make a Voluntary Disclosure to the FTA	20 business days from the date when the Taxable Person became aware of the error
10,000 Dirhams or less	correct the error in the Tax Return for the Tax Period in which the error has been discovered (if he is obligated to submit a Tax Return to the FTA for this Tax Period); or	the due date for the submission of the respective Tax Return
	make a Voluntary Disclosure to the FTA (if there is no Tax Return through which the error can be corrected)	within 20 business days from the date of becoming aware of the error

 

If you want to go through the detailed guidance, kindly download the document here: VAT-Excise File

 

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