An entity while preparing its VAT Return for the fourth quarter “Oct – Dec” realized that it has missed paying AED 4000 VAT tax per quarter for last three quarters from January till September under Reverse Charge Mechanism. In UAE, Reverse Charge Mechanism (Article 48) is applicable in case of import of goods or services into UAE. The Reverse Charge moves the responsibility of reporting a VAT transaction from seller to the buyer (recipient) of good or service – the recipient reports both their purchase (input VAT) and the supplier’s sale (output VAT) in their VAT return for the same quarter. These two declarations finally offset each other from payment point of view.
Source: gccfintax.com
