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Extension Approved for Filing VAT Returns

The Federal Tax Authority has issued a directive extending the filing date for VAT Returns for the Tax Period ending 31 March 2020, from 28 April 2020 till 28 May 2020.

The FTA, the government entity responsible for the administration, collection and enforcement of federal taxes, was established in 2016 by the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, via Federal Decree-Law 13 of 2016.

The payment of the VAT due for this Tax Period will also only be payable on 28 May 2020. This extension should provide an extended period for Taxable Persons to collect payments for Tax Invoices due to them to allow them to meet their VAT obligations to the FTA.

A VAT Return calculates how much VAT you owe by looking at: Your total sales and purchases across a three-month accounting period. The amount of VAT you owe for sales. The amount of VAT you can reclaim for purchases made by your business.

The FTA further announced that the extension will also apply to Taxable Persons that lodge monthly VAT Returns and that the VAT Return and payment of the VAT due for the Tax Period from 1 March 2020 till 31 March 2020 will also only be due on 28 May 2020.

The abovementioned directive from the FTA will only pertain to VAT Returns for the Tax Periods that ended on 31 March 2020, and does not affect any other Tax Periods where the deadline for filing Tax Returns and settling of payable taxes does not fall in April 2020.

Tax Period Extended for Excise Tax Registrants

In an effort to support Excise Tax Registrants during the difficult circumstances caused by COVID-19, the Federal Tax Authority has decided to extend the tax period for businesses registered for Excise Tax, which commenced on 1/3/2020 for one month.

The tax period shall now respectively cover the months of March 2020 and April 2020, allowing registered businesses sufficient time to fulfil their tax obligations.

BSA traces its roots to 2001 when it was first founded in Dubai, with the primary mission of offering legal services that combine comprehensive knowledge of local law with a modernised and progressive approach to legal practice.

Today, following the joining of Senior Partner Dr Ahmad Bin Hezeem, former Director General of Dubai Courts, and the opening of further offices across the Middle East and now France, we have consolidated our excellence-driven regional reach.

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Excise Tax Registrants must fulfil the following obligations:

  • file two separate tax returns, one for March 2020 and one for April 2020, by no later than Sunday, May 17, 2020; and
    ensure that the Federal Tax Authority has received the tax payable for the tax periods as reported in the March 2020 and April 2020 tax returns by no later than Sunday, May 17, 2020.

Our expert tax lawyers are available to assist with this and all your tax needs during these difficult times.

There is no registration threshold for Excise Tax, therefore any person who has the intention to be involved in import or produce excise goods or wish to operate a tax warehouse must register as an excise taxable person.

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Our team stays abreast of regional and international legal developments and tailors the firm’s advisory approach to our clients’ respective industry sector needs.