Under UAE tax laws, VAT registered entities must file their VAT returns and clear any tax payments due by the 28th day following the end of their designated tax period. This period is typically quarterly for businesses with annual turnover below AED 150 million, and monthly for larger entities.
Late filing or late payment of VAT attracts strict administrative penalties from the Federal Tax Authority. Missing a filing deadline results in an initial penalty of AED 1,000 for the first offence, increasing to AED 2,000 for repetitions. Late tax payments attract percentage-based penalties that accrue daily.
Proper VAT reconciliation requires matching customs import statements with purchases and verifying that all output tax on sales is declared correctly. Retaining valid tax invoices, export proofs, and customs declarations for a minimum of 5 years is a statutory requirement under the VAT Executive Regulations.