1. Not recording zero rated and exempted sales –
All entities correctly file the input and output VAT along with the VAT payables
and receivables, but they may miss out to record the zero rated and taxexempt sales. Recording the zero rated
and exempted sales are must while filing the VAT return
2. Lack of proper maintenance of records –
It is mandatory to maintain proper records of every transaction of at least past
five years for all the companies. The records include purchase and sales
records, payments, and receipts, import and export records, bank statement of
transactions, salary records of employees, etc.
3. Delay in VAT Return filing –
The Authority clearly specifies the deadlines for filing the VAT returns. The
firms must ensure that it files its VAT returns on or before the deadlines
4. Errors in VAT calculation –
The firms must ensure that they apply the correct VAT rates while calculating
them. This is one of the areas where many firms make mistakes. It will result in fines and penalties
5. Mistakes regarding Reverse Charge Mechanism transaction –
Reverse charge is applicable when the firm imports goods and services to UAE. If the TRN is linked with the
customs code, it becomes easy to account for the VAT but usually the firms do not link their VAT number with
the portal which results in various issues while claiming for input VAT. The import transactions are reflected on
the portal of customs so, the firms must be vigilant while recording the transactions.