UAE: Updated voluntary disclosure user guide for VAT and excise tax

Requirements and procedures related to the submission of voluntary disclosures for active and deregistered tax groups

VAT and excise tax

The tax authority has issued an amended voluntary disclosure user guide for value added tax (VAT) and excise tax purposes. 

Summary of changes

The updated voluntary disclosure user guide further explains the requirements and procedures specifically related to the submission of voluntary disclosures for active and deregistered tax groups.

  • Tax group voluntary disclosures must be submitted by the active group representative member only, or by the last representative member before the tax group was deregistered.
  • Other tax group members can only view submissions made to the tax authority by the representative member.
  • Voluntary disclosures can be submitted against submitted VAT returns, acknowledged voluntary disclosures, or acknowledged tax assessments. The voluntary disclosure user guide provides separate procedures on how to access the voluntary disclosure form in various scenarios.
  • In line with guidance available previously, an official letter must be prepared and attached for the tax authority’s review along with the voluntary disclosure form. The letter needs to include background facts and a detailed description of the errors disclosed. The letter must be prepared regardless of whether the voluntary disclosure is submitted by an active or deregistered tax group.

Background

Effective 28 June 2021, the Cabinet Decision No. 49 of 2021 introduced a number of provisions, including reductions in penalties when taxpayers submit voluntary disclosures, aimed at encouraging taxpayers to correct any mistakes made previously by submitting voluntary disclosures to obtain reduced penalties.

Under the new penalty regime, the application of the voluntary disclosure penalties has changed, whereby the penalty calculation does not depend on the taxpayer’s / tax authority’s overall net balance resulting from the correction, but instead is calculated based on the amount of the correction made in the submitted voluntary disclosure.

Read a February 2022 report prepared by the KPMG member firm in the United Arab Emirates

 

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