VOLUNTARY DISCLOSURE USER GUIDE
The Federal Tax Authority has provided a voluntary disclosure form to enable the taxpayer to notify to the FTA an error or omission in a tax return, assessment or a refund application. To provide accurate answers to taxpayer’s queries, the FTA in July 2018 issued a voluntary disclosure guide for VAT.
CASES IN WHICH VOLUNTARY DISCLOSURE FORM IS TO BE SUBMITTED
A taxpayer is required to submit a voluntary disclosure form in case of an error or omission in a tax return, assessment or refund application. However, specific scenarios when a taxpayer is required to submit this form to the FTA are listed below :
- In case the calculation of the payable tax as per the tax law is less than what it should have been due to the taxpayer’s mistake of submitting erroneous tax return or assessment.
- In case the refund amount which the taxpayer is entitled to receive is more than what it should have been due to the taxpayer’s mistake of submitting incorrect tax refund application.
- In case the calculation of the payable tax as per the tax law is more than what it should have been due to the taxpayer’s mistake of submitting erroneous tax return or assessment.
- In case the refund amount which the taxpayer is entitled to receive is less than what it should have been due to the taxpayer’s mistake of submitting incorrect tax refund application.
TIME LIMIT FOR VOLUNTARY DISCLOSURE
- If an error resulted in a calculation of the Payable Tax is more than 10000 Dh, then the taxpayer is required to make a voluntary disclosure to the FTA within 20 business days of being aware of the error.
- If an error resulted in a calculation of the Payable Tax is 10000 Dh or less, then the taxpayer is required to:
- Correct the error in the tax return if he is under an obligation to submit a tax return to the FTA for that tax period before the due date for submitting the respective tax return.
- Make a voluntary disclosure to the FTA in case error can’t be corrected within 20 business days of being aware of the error
SUBMITTING THE VOLUNTARY DISCLOSURE FORM FOR VAT
STEP 1: The taxpayer is required to go to the “VAT201- VAT Returns” tab in the VAT section and is required to click on the “ SUbmit Voluntary Disclosure” button on the row of the VAT return against which the taxpayer wishes to submit the Voluntary Disclosure. Clicking this would redirect the taxpayer to the Voluntary Disclosure form for that particular tax period.
STEP 2: Once redirected the taxpayer is required to fill details pertaining to the taxable person and VAT return period.
DETAILS THAT ARE TO BE SUBMITTED
- Tax registration number (TRN)
- Taxpayer’s Name, Address (Arabic and English)
- VAT return period, due date
- Tax year’s end
- Voluntary disclosure residence number
- Date of identification of the error
STEP 3: The taxpayer is then required to correct the errors.The form is divided into reported section and current section. The reported section includes the amounts already disclosed in the latest tax return, assessment or voluntary disclosure. These are pre-populated as they allow the taxpayer to see the latest figures which correspond to the tax period. The “ As Current” fields refer to the corrected VAT return/ voluntary disclosure or tax assessment values. The taxpayer is required to report the final VAT amounts corresponding to the box for the respective tax period. The amount noted should be the actual total values for that tax period and not the erroneous amounts.
STEP 4: The taxpayer is required to upload the letter mentioning the background facts, detailed description of the disclosed errors, reasons for voluntary disclosure and the impact of the errors on the relevant sections or boxes of the tax return.
STEP 5: The taxpayer is then required to review the Authorized Signatory details that are pre-populated in the registration application and check the declaration.
STEP 6:Before clicking on the “ Submit” button, the taxpayer is required to carefully review all the entered information. The taxpayer can either save the progress by clicking on the “ Save as Draft” button or cancel the form by clicking, “Cancel” button.
Once submitted, the FTA can also impose penalties which vary from cases to cases.
