What is a voluntary disclosure to FTA?

In UAE, if there is any error or omission in a taxpayers tax return, tax assessment, or tax refund application then the taxpayer is obliged to voluntarily disclose the same in order to notify the FTA regarding the same.

When should a voluntary disclosure be made to FTA?

Article 8 of cabinet decision no. 36 of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures, a taxpayer is needed to voluntary disclose their problems in Tax returns in the following cases:

If the taxpayers Tax Return or Assessment is incorrect which results in an underpayment of their due tax to the government in an amount that exceeds AED 10,000.

If the calculation of the filed tax by the taxpayer is less than the actual amount but which is not more than AED 10,000 and there is no way to rectify this error; or

If the calculation of the filed tax by the taxpayer is more than what the taxpayer actually needs to pay to the FTA i.e. the taxpayer is entitled for a refund from the FTA for an over payment of Tax Returns, unless the error was due to an incorrect Tax Return or Assessment by the government.

In these cases the taxpayer needs to file a voluntary disclosure within 20 business days of discovering the error in order to avoid the penalties.

What are the steps to submit a voluntary disclosure to FTA in respect of a VAT return?

For submitting a Voluntary disclosure to the FTA against a VAT return which is already submitted to the FTA, the taxpayer needs to go to the VAT201 – VAT Returns tab in the VAT section of the FTA’s portal and then click on the Submit Voluntary Disclosure button in the relevant VAT return row for which a taxpayer has to make a Voluntary disclosure.