
Every registered individual or business must regularly submit a VAT Return, also known as a Tax Return, to the appropriate tax authority. Occasionally, you may encounter a “VAT Error” when completing this return. This occurs when there’s a discrepancy in charging and accounting for output VAT or reclaiming input tax.
Whether you’ve overpaid or underpaid the Federal Tax Authority (FTA), it’s crucial to correct any inaccuracies in your reported tax amounts. The FTA provides Form 211 for rectifying errors or omissions found in previously submitted VAT Return Form 201.
It’s important to note that, except for cases of tax evasion or failure to register, you have a five-year window to correct errors in previous VAT filings. You can voluntarily disclose errors to the FTA within five years from the end of the tax period in which they occurred, starting from January 1, 2018.
In cases of tax evasion or non-registration, the FTA has the authority to collect taxes for up to 15 years from the end of the relevant tax period. Additionally, fines may be imposed by the FTA for tax errors made by taxable entities.

VAT Errors and Vat Returns
Variations in VAT returns can take place in various ways, each necessitating a distinct approach to correction. The magnitude of the error dictates the appropriate course of action:
1. For tax discrepancies of AED 10,000 or less identified within a specific reporting period, corrections can be made directly on the tax return. If the error cannot be rectified through an amended tax return (e.g., if the taxable person is no longer VAT registered), a voluntary disclosure must be submitted to the Federal Tax Authority (FTA).
2. If the tax error exceeds AED 10,000, a formal voluntary disclosure process must be initiated by notifying the FTA. This notification should be made within 20 working days of discovering the error and must adhere to the exact format specified by the FTA.
Tax Invoice
Errors on tax invoices can occur, particularly in cases of:
Incorrect Tax Application: When tax is erroneously applied to an invoice, whether when no tax was due on the delivered goods/services or the wrong tax amount is charged.
To rectify such errors, suppliers must either correct the overcharged tax by providing a credit note or declare and adjust the correct tax amount in their tax return. For example, if VAT was incorrectly levied on a zero-rated supply, a credit note should be issued to reimburse the wrongly charged VAT. Conversely, if VAT was omitted from a standard-rated supply, a new tax invoice with the accurate VAT amount needs to be issued.
Customers who suspect incorrect or excessive taxation should contact the supplier for a credit note or a revised invoice reflecting the correct tax amount. This ensures compliance with tax regulations and enables recipients to claim input tax deductions with accurate documentation.
Tax Refunds
Even individuals or businesses not established in a GCC Implementing State and not involved in UAE business activities must adhere to specific procedures when rectifying errors in tax refund applications with the FTA.
Regardless of the error’s magnitude, prompt action is required: a voluntary disclosure must be submitted to the FTA within a strict 20-business-day period upon discovering any errors. For example, if a tax error is detected during an internal audit, it’s imperative to promptly notify the FTA through a voluntary disclosure.
However, if the error in the tax refund application stems from inaccuracies in a tax return or an incorrect tax assessment, the appropriate procedures for rectifying errors in returns or assessments must be followed.
Whether the error can be rectified on a subsequent VAT return or through a voluntary disclosure depends on its nature and extent. Adhering to these procedures ensures compliance with legal standards and facilitates accurate financial and tax reporting.
Why Unicorn Global is Your Best Choice
Every taxpayer in the UAE is mandated to file their VAT Return accurately within the specified time frame of 28 days after the end of each tax period, as per UAE VAT Law. It’s crucial to ensure precise VAT Return Filing to minimize the need for utilizing the VAT Voluntary Disclosure Form 211 and avoid penalties.
Unicorn Global Solutions provides expert support in correcting VAT errors for VAT returns in the UAE. Our team ensures accurate adjustments, compliance with FTA regulations, and timely submissions. Rely on us for hassle-free VAT error correction and compliance solutions. For more details Text us on whatsApp or call us today