Filing VAT Returns and Making Payments in the UAE (2026 Complete Guide)

VAT is an indirect tax that applies to most goods and services. In January 2018, the UAE implemented the VAT by the standard rate of 5%. The amendments and executive regulations offer the government a chance to update VAT rules. These changes enhance clarity of the rules and boost compliance. Paying the VAT on time will enable the businesses to avoid penalty and maintain a good cash flow in 2026.

If your business is registered under the VAT process, you need to apply to the EmaraTax portal to file your VAT return. You should report and pay taxable sales, input VAT and net tax prior to the deadline. FTA is more strict in the data checks and in the regularity of audits so you have to maintain proper records of invoices and transactions. This blog outlines the filing processes, payment methods, dates, documents needed and best practices. Let’s get straight into this blog.

UAE VAT Old vs New Rules (Before 2026 vs From 2026)

In 2026, the importance of the VAT filing has increased and FTA inspects data more carefully. They impose more serious penalties for serious mistakes. Mismatches have also become easier to identify with the digital reporting and stricter documentation requirements.  Businesses need to submit the information correctly, pay the sums on the due date and maintain proper records. 

Before 2026

• Self-Invoicing: Businesses often issued self-invoices to account for VAT under the reverse charge on certain imports especially where supplier documentation was limited.
• Refund Timing: There was no clear “five-year expiry” framework for using/claiming excess recoverable VAT in the same way introduced from 2026.
• Input VAT Recovery: VAT recovery typically relied on having the right invoice and business-use evidence, with less explicit emphasis on “knew/should-have-known” evasion linkage checks.
• Import VAT Proof: Self-invoices were commonly kept as supporting proof for VAT entries related to imports and reverse charge reporting.

Effective From January 2026

These amendments ultimately, the outcomes of the changes that enhance transparency and the reinforcement of checks by the Federal Tax Authority (FTA). Take a look at the following amendments to the VAT law which are effective in January 2026.

• Simple Mechanism of Reverse charge:  A self-invoice is no longer required by business to import goods in the reverse-charge rule. They may support records of the transaction.
• Documentation still matters: Self-invoicing is not mandatory although VAT-registered enterprises are expected to maintain a full collection of documents on each supply.
• Five year deadline for refunds: The businesses are required to make any excess VAT request within five years. Late submission of that deadline will result in the loss of the right to refund.
• Stronger rules for input VAT claims: The businesses are required to make any excess VAT request within five years. Late submission of that deadline will result in the loss of the right to refund.

 

Why do errors now lead to penalties & audits?

In 2026, VAT errors are more frequent due to the increased depth of data examination. This is conducted by authorities and their focus is on high risk reports and stricter fines. The following are the main causes to this change:

• Stronger data checks in 2026 make VAT mistakes easier to identify and more likely to trigger audits.
• The FTA selects audits using risk signals like mismatched data, unusual VAT credits and inconsistent cross tax reporting.
• The penalties will go up as of April 2026. There is a 14% annual penalty of late payment and a penalty of up to 300% unpaid VAT. 
• FTA audits controls and documentation and there will be detailed audits on occurrence of poor records or repetitive mistakes.  
• Effective systems and aggressive compliance assist to avoid fines, secure cash flow and not get derailed.

Who Is Required to File VAT Returns in the UAE?

Registration and VAT returns filing is mostly based on your annual turnover and the way you operate. You have to register VAT if your taxable sales are more than AED 375,000. You are eligible to file a voluntary registration in order to claim the input VAT on the business expenditure in the range of AED 187,500-375,000. When registration is done, you are required to submit VAT returns on a regular basis. You will file a nil return, If you did not do any activity. This regulation governs the mainland and free-zone areas especially for the ones that engage in imports, exports, reverse-charge transactions and the ones that involve cross-border trades.

VAT Filing Periods & Deadlines 

Topic	Monthly Filing	Quarterly Filing
Who it applies to	Usually higher volume businesses (as assigned by FTA)	Usually small to mid sized businesses (as assigned by FTA)
Tax period length	1 calendar month	3 calendar months
Filing deadline	28th of the following month	28th of the month after the quarter ends
Payment deadline	Same as filing deadline	Same as filing deadline
If deadline falls on a public holiday	Due date shifts to the next working day	Due date shifts to the next working day
Consequences of late filing or payment	Penalties, late payment charges, higher audit attention	Penalties, late payment charges, higher

 

Documents Required Before Filing VAT Returns

Make sure that you have prepared the important documents.. These are the documents that allow you to file correctly and minimize the chances of having FTA queries:

• Tax Registration Certificate (TRC) confirms that you are registered in terms of VAT.  
• Trade license Shows that your business has been registered.  
• Sales tax invoices provide customer detail, VAT and values of transactions.  
• Purchase invoices indicate payment of VAT on business expenses.  
• Financial records such as bank statements, profit and loss and balance sheet on the tax period. 
• Import and export documents such as customs declarations for cross border transactions
• Credit notes and debit notes to any adjustments or returns in relation to an invoice. 
• Previous VAT returns to keep reporting consistent

Why do Missing Documents Cause Errors?

Missing Documents make this process risky so here are the reasons that cause errors:

• Missing Sales invoices would not allow you to report VAT completely.
• Absence of purchase invoices or import papers, you can be rejected in input VAT claims. 
• You may not be accepted to make adjustments without credit or debit notes.
• Mismatching of bank records and VAT files can initiate audit penalties and interests.

Step-by-Step Process to File VAT Returns on the FTA Portal

Step 1: Log in to EmaraTax

Go to the official Emirates Taxes site of the FTA and log-in using your registered username (or e-mail) and password. UAE Pass will allow accelerating the login process. Ensure that it is linked with the account to your TRN.

Step 2: Open the VAT filing page

The VAT tab is in the dashboard, after which you should select My Filings. At this point, you can click on the View All to view all tax periods and their status of filing. This is the starting place where you start tracking your VAT returns.

Step 3: Select the open tax period

Locate the VAT period that shows an open period. It means VAT is due and not yet submitted. Confirm that the dates are appropriate to your reporting cycle  and then click on the file.

Step 4: Confirm instructions and start

Select the instructions shown, put a check on the box to indicate that you have read the instructions. Start to fill out the figures on the VAT return form.

Step 5: Complete the online form (VAT 201)

Complete each of the sections below and move on:

• Details of Person to be taxed: TRN, business name and address are automatically populated by EmaraTax. Make sure that they are similar to your records. 
• Period in which VAT Return is made: This shows the period in which the tax return is made, the date of the filing and the reference of the tax return. Trace on the follow up with the same reference.
• VAT on Sales and Other Outputs: Add sales based on VAT charge, 5% of normal charge and zero charge sales and exempt and reverse charge sales. It includes adjustment of credit notes, discounts and bad debts.
•  VAT on Expenses and Other inputs: Recoverable input VAT on purchases and expenses Having an eligible purchase or expense is included. This includes regular priced charges, reverse charge purchase and where necessary, imports.
• Calculation of Net VAT Due: Box 12 of output VAT, Box 13 of input VAT and Box 14 NET VAT due calculate net VAT Due. A negative value means that there should be a credit or refund and a positive value states that there should be a payable VAT.

Step 6: Review your VAT return

Check all the figures and file the return. Verify the balances with your invoices, VAT statement and ledger balances. Make sure that sales, purchases, reverse-charge transactions and corrections are sent to the proper boxes.

Step 7: Submit the return

Click Submit on EmaraTax. The system will create a reference number and a confirmation.

Step 8: Pay VAT if payable

Visit My Payments and then pay the balance in advance through approved electronic payment methods like e-Dirham or bank remittance. Settle in advance so as to escape fees and penalties charged on past due.

 

Reach out to KWS & Co to discuss how we can simplify your VAT obligations and keep your compliance on track in 2026 and beyond.

 

Common VAT Filing Mistakes That Lead to Penalties 

The following are some of the common mistakes that attract penalties:

1) Missing VAT deadlines

Penalties and interest are normally initiated due to late filing or payment. Set reminders and internal deadlines before actual deadlines. One should have given the charge of filing and payment to be used.

2) Claiming VAT on ineligible expenses

VAT cannot recover some costs so it may reject claims.Common examples include entertainment expenses, certain employee benefits and costs without a valid tax invoice.

3) Recording sales wrongly

Duplicate invoices, missing invoices, or invoices with incorrect VAT codes will affect VAT calculations. Standardise the VAT codes and educate the personnel on how to handle them. Balance records are to be done prior to the filing to prevent mistakes in sales recording.

 4) Inability to revise VAT programs or registration

When turnover or costs vary then VAT arrangement can become automatically incorrect. Modify your VAT scheme and make significant business changes, remove unnecessary VAT expenses and prevent non-compliance.

5) Overlooking digital record keeping rules

Digital VAT regulation involves proper digital documentation and audit trail. The compliance may be affected when the process of spreadsheets and copy-pasting is performed manually. Use compatible accounts software and maintain electronic connections between invoices, reports and VAT returns.  

7) Not reviewing VAT returns before submission

Online VAT control needs an audit trail and proper documentation. Copying and spreadsheets manual enhance non-compliance risk. Make use of compatible accounting software and have electronic connections among invoices, reports and VAT returns.

8) Out of date VAT knowledge

Tax regulations evolve and using old instructions makes the same mistakes. This becomes riskier. All you need to do is to conduct periodic reviews of VAT and maintain personnel on up-to-date requirements.  

9) Late voluntary disclosures

Delaying correction of known errors increases penalties and audit scrutiny. Submit voluntary disclosures quickly and keep a clear correction file with evidence and calculations.

VAT Penalties for Late Filing, Late Payment & Errors

The Federal Tax Authority (FTA) applies penalties to ensure businesses file VAT returns on time, pay VAT by the deadline, and report figures correctly. The penalty amount depends on the type of breach and how often it happens.

1. Late Payment Penalties

These types of penalties apply when you do not pay VAT by the due date. The FTA charges 2% of the unpaid VAT for the first month, then 4% for each following month, so delays can add up quickly and may reach up to 300% of the unpaid tax.

2. Late Filing Penalties

These apply when you submit the VAT return after the deadline. The FTA charges AED 1,000 for the first late filing, AED 2,000 for the second late filing within 24 months, and AED 10,000 for further late filings within the same 24 month period.

3. Tax Evasion Penalties

These apply in serious cases such as fraud or intentional misreporting. Penalties can range from 50% to 300% of the tax amount involved, depending on the severity of the case.

4. Voluntary disclosure penalties

Voluntary disclosure lets you report and correct VAT errors yourself before the FTA finds them in an audit or investigation. It shows you are acting in good faith and helps you fix mistakes early, which can reduce the risk of higher penalties.

How to Claim a VAT Refund in the UAE Successfully?

If your VAT return shows a refundable position, you can submit a refund request through the FTA portal using the steps below.

• Register on the FTA portal, create your Taxable Person profile, and obtain your TRN before applying.
• Complete the VAT refund request form VAT311 with the required period and refund details.
• Download the official VAT Refund Excel template, fill in the invoice details, and upload it with VAT311.
• Keep complete supporting records for sales, purchases, invoices, and receipts to support the claim.
• Respond quickly if the FTA requests extra information or documents to verify your refund.
• Refunds are processed only when input VAT exceeds output VAT, after the FTA reviews your VAT returns.

What are the Benefits of Outsourcing VAT Return Filing?

The benefits below explain why outsourcing VAT returns can be a practical move for growing businesses:

1. Helps you stay compliant 

VAT rules change often, and missing an update can lead to fines. VAT experts follow the latest FTA requirements, apply the correct treatment, and make sure returns are filed and paid on time with proper documentation.

2. Saves time for your team

VAT filing takes time to collect invoices, reconcile totals, and prepare reports. Outsourcing removes this routine workload so your team can focus on budgeting, cash flow, and business decisions.

3. Reduces mistakes and penalties 

Small errors like wrong VAT codes or missing invoices can trigger penalties or audits. Professionals review the numbers, validate documents, and catch issues early to reduce corrections and cost.

4. Gives you expert support and better tools 

VAT specialists handle complex areas like reverse charge and cross border supplies with more confidence. They use structured checks and modern software to speed up filing, improve accuracy, and support audits.

5. Lowers non compliance risk 

Non compliance can lead to penalties, audits, and reputational damage. Outsourcing adds stronger controls and a second layer of review, helping you stay consistent across periods and meet FTA expectations.

How KWS & Co Helps with VAT Filing & Compliance?

VAT filing becomes stressful when deadlines approach, records don’t match, and small errors risk penalties, audit queries, or refund delays. KWS & Co simplifies compliance by preparing and filing your VAT returns through EmaraTax, reviewing your data for gaps, and correcting errors before submission. We also handle voluntary disclosures when you need to fix past returns, support VAT refund claims with VAT311 and required schedules, and represent you during FTA audits by preparing documents, reconciliations, and clear responses to FTA questions.

FAQS

Is VAT filing mandatory if no sales?

Yes. If you are VAT registered, you must file a VAT return for every tax period even if you made no sales or purchases. In that case, you submit a nil return through EmaraTax.

Can VAT returns be amended after submission?

You cannot directly edit a submitted VAT return, but you can correct errors through the FTA voluntary disclosure process. You must disclose the difference, explain the reason, and keep supporting documents for review.

What happens if VAT return is filed late?

Late filing can trigger administrative penalties, and late payment can add additional charges and interest. Repeated delays may also increase audit attention. Always file and pay by the deadline for your tax period.

Are free zone companies required to file VAT?

Yes, if a free zone company is VAT registered, it must file VAT returns for every tax period. This applies even if it mainly trades outside the UAE, and even if it has no activity.

Can VAT penalties be reduced?

Yes, penalties may be reduced in some cases, especially when you correct errors early through voluntary disclosure and pay outstanding VAT quickly. Strong documentation and timely responses to FTA requests also help limit escalation.