Voluntary Disclosure Filing

What is Voluntary Disclosure Filing ?

Voluntary Disclosure Filing is a process that allows a assessee to come forward and report any errors or omissions in their tax returns or payments to the tax authority. The Federal Tax Authority (FTA) of UAE expects taxpayers to make a voluntary disclosure to correct their tax returns and avoid penalties.

At Protax, we understand that the Voluntary Disclosure Filing process can be challenging and confusing for many taxpayers. That’s why our team of tax experts is here to help you carry out the voluntary disclosure process and ensure a successful outcome.

Why Voluntary Disclosure Filing is important ?

You may wonder if it’s worth it to file a voluntary disclosure about a mistake you made. The answer is yes, and let me tell you why. By filing a voluntary disclosure, you show the tax authority that you’re an honest taxpayer. In addition, you’ll receive reduced penalties compared to if the tax authority discovered the mistake on their own. Most importantly, when your taxes are correct, you’ll have peace of mind and can focus on running your business without any worries.

Steps to file Voluntary Disclosure

Our team of tax advisors in Dubai will guide you through voluntary disclosure filing process by providing a detailed explanation and calculating the due taxes correctly. Additionally, our advisors will support and assist you until a satisfactory agreement is reached with the tax authority.

Steps :

  1. Our agents will inform the Federal Tax Authority that you intend to do voluntary disclosure filing.
  2. Once the FTA receives the notification, we will receive a registration number and confirmation.
  3. Next, we will explain what went wrong and the issues that need to be addressed in the voluntary disclosure.
  4. We will also provide an explanation for any mistakes or omissions made in the VAT Returns.
  5. We’ll calculate the amount of tax, penalties, and interest that are due and report in our Voluntary Disclosure Filing.
  6. After receiving the disclosure, the FTA will review or process it.

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Time limits for Voluntary Disclosure Filing

  • If the taxpayer finds that they have made an error that has resulted in paying less than AED 10,000, it is mandatory for them to voluntarily disclose it. The disclosure should be made within twenty business days from the date when the taxpayer becomes aware of the error.
  • Furthermore, if the payable tax is AED 10,000 or less due to the error, the taxpayer needs to correct the error before the deadline for submitting the tax return of that period. If there is no tax return where the error can be corrected, the taxpayer has a 20-day allowance to report the error from the date they become aware of it.
A man looking at his watch to find out the time to file the Voluntary Disclsoure
Team of Tax Consultants Explaining Concepts of Voluntary Disclosure Filing in Dubai

How Protax can help you in Voluntary Disclosure Filing ?

With their experience and expertise in handling Voluntary Disclosure Filing process in UAE, our team can help you with :

  • Review and submission of supporting documentation

    To follow FTA’s rules for Voluntary Disclosure Filing process, our team will review and submit supporting documents that includes a detailed letter containing the background facts coupled with all errors made. This letter will explain the reasons for Voluntary Diclosure Filing and will highlight the disclosed errors to assist the tax authority in accepting the request.

  • Calculation of the tax due

    In addition to calculating the correct tax owed, our VAT experts in UAE can also assist you in reporting any incorrect amounts provided to the FTA. By providing correct values, we ensure that both figures are presented, thereby informing the local tax authority of any mismatch.
  • Settlement of penalties

    We are here to help you settle any penalties that may arise from Voluntary Disclosure Filing. It’s important to note that while penalties can be imposed for errors, they are significantly reduced when you voluntarily disclose them. In case you are charged with penalties, we will assist you in finding the available options and finding the best approach. Our team will guide you every step of the way to ensure the optimal outcome.

At Protax, we understand that you still require expert assistance. Therefore, we advice you to contact us immediately. Our team is available to answer any questions you may have and assist you in settling your outstanding liabilities to ensure that you comply with the authorities.