VAT Error and Correcting Errors

A VAT error occurs when a VAT-registered person incorrectly reports output or input VAT, resulting in underpayment or overpayment. Corrections are necessary to ensure accurate tax payments and compliance with regulations.
Invoice errors arise when incorrect VAT amounts are charged. Suppliers must issue credit notes for overcharged VAT or new invoices for undercharged VAT to correct mistakes. Consulting VAT experts can help manage these corrections.
Errors in VAT returns depend on the error’s value. Errors under AED 10,000 should be corrected in the next return, while errors above this require voluntary disclosure to the FTA within 20 working days of discovery.
FTA assessments may also contain errors. These should be corrected either through tax return adjustments or voluntary disclosures, depending on the error’s value and circumstances, to ensure accurate tax liability.
Errors in VAT refund claims must be disclosed voluntarily within 20 business days. Depending on the error’s value, corrections may be made via voluntary disclosure or adjustments in subsequent VAT returns.
The FTA allows corrections for errors within five years of occurrence. In cases of tax evasion or non-registration, assessments can be conducted within 15 years. Timely disclosure and correction are crucial to avoid penalties.