UAE VAT return filing and VAT payment deadline extended by one month
The United Arab Emirates (UAE) Federal Tax Authority (FTA) has announced in a notice to VAT registrants that the deadline for the submission of VAT returns and payment of due tax for the tax periods ended 31 March 2020 will be extended by one month. The measures have been introduced on an exceptional basis by the FTA in order to ease the compliance burden on businesses facing challenges due to the preventive measures taken as a result of the COVID-19 crisis. The notice issued by the FTA can be found on the following link.
VAT returns and payment of due tax which would have been due on 28 April 2020 will instead be due on 28 May 2020. This applies to VAT returns with a monthly tax period of 1 March 2020 to 31 March 2020, and VAT returns with a quarterly tax period of 1 January 2020 to 31 March 2020. Any payable tax amount must be received by the FTA by the revised deadline of 28 May 2020.
It is likely that taxpayers which file VAT returns on a monthly basis will therefore be required to submit two separate VAT returns for the March and April tax periods by 28 May 2020, rather than a single combined VAT return covering a two month tax period, in line with similar measures recently announced by the FTA in relation to Excise Tax returns. For ease of reference, the full details are available on this link. To date, there is no indication that further extensions will be granted for future tax periods, however businesses should monitor any further developments closely.
It should also be noted that these measures apply only to businesses due to file VAT returns for tax periods ending 31 March 2020, and that there have been no measures introduced to date to apply easements in relation to tax periods with an end date other than 31 March 2020.
We recommend that businesses which wish to avail the extension carry out their VAT return preparation and internal approval process for the tax period ended 31 March 2020 on their usual timeline to the furthest extent possible, in order to avoid any unnecessary issues or delays at the time of submission.
The extensions granted by the FTA take place following similar developments in the Kingdom of Saudi Arabia, as tax authorities in the region take action to mitigate pressure on businesses dealing with the financial and administrative burden resulting from current economic and social conditions. For more details, please refer to our recent alert.