Everything to know about Voluntary Disclosure under UAE Tax Procedure Law

The government of the United Arab Emirates has taken many steps to ensure that the businesses in the country, as well as the businesses which are coming into the county from all around the world, do not face any difficulty. The government takes various steps and amends various laws to make sure of it. One such activity which will help a business in the country is Voluntary Disclosure.

A Voluntary Disclosure is required to be made by a taxable person or entity. This disclosure will suggest to the Federal Tax Authority (FTA) that a mistake has been made in the calculation of the returns, refund or assessment of the tax. The disclosure is made by the taxable entity according to Federal Law Number 7 of 2017 for Tax Procedures. These disclosures also require the assistance of the Cabinet Decision Number 36 of 2017 of Executive Regulations on Federal Law Number 7.

The disclosure will allow the management of the company or an individual to provide a piece of advice to the Federal Trade Authority (FTA) that there is a mistake in the tax Return, Assessment or Refund.

Voluntary Disclosure according to the UAE Law

According to Article 8 of the Executive Regulations, the following are the repercussions of the Voluntary Disclosures:

1. In case a Taxable Person becomes aware that the Tax return Assessment Amount is wrong in such a way that the tax which is to be payable is less than the original tax required (more than the amount of AED 10000) then in such a case the person should make a Voluntary Disclosure about the amount within 20 days of coming to know about the error.
2. In case a Taxable Person becomes aware that the Tax return Assessment Amount is wrong in such a way that the tax which is to be payable is less than the original tax required (by not exceeding the amount of AED 10000) then there are two different options available to the entity which are:
   1. In the case the entity is required to submit a Tax Return for the specific period, then the original amount should be put in and the error should be corrected for the tax period in which the error has been discovered.
   2. In case there is no tax return in which the entity can submit the revised amount of taxes to be paid, a Voluntary Disclosure should be made within 20 days from the time which the error has come into notice.
3. If the entity comes to the knowledge that the Tax Refund Application which has been submitted has errors in it, then the exceeding or the amount by which the result varies should be mentioned in the Voluntary Disclosure which needs to be made within 20 days of finding the error.

The Federal Tax Authority will direct a form in accordance to which a Voluntary Disclosure can be made according to Article 8 ($) of the Executive Regulation.

How can one submit the Voluntary Disclosure?

The government of the UAE has taken into consideration that the submission of the Voluntary Disclosure should not be problematic for businesses. One can submit the Voluntary Disclosure through the VAT section available in the eServices portal on the website of the Federal Trade Authority (FTA).

This form will comprise various fields and will be prepopulated with the details of the taxable entity in the applicable tax period. All the taxable entity has to do is to provide the correct information along with the supporting data for the taxes. It is also possible for the taxable entity to track the current status of the disclosure.

To understand the change and the impact it will have on the business, the management should take the assistance of an expert and professional firm which will understand all the requirements of the business and provide solutions accordingly. One such firm in the United Arab Emirates is JAXA Chartered Accountants.

The Experts at JAXA will take care that all the business requirements are fulfilled and the company faces no problem in the future. For more details on the services provided by JAXA, feel free to Contact Us. We will be happy to help.