Prepare a VAT return
Create a return for a period, let the system fill the boxes from posted documents, and clear anything that blocks approval.
Before you begin
- An active registration and an active return form exist for the same country and tax (Registrations and country setup, Return forms and boxes).
- All documents of the period are posted. Prepare reads posted documents only.
- You have tax.return.prepare.
Steps: create the return
- Choose Tax > Returns.
- Press New.
- Choose the Registration.
- Choose the Return form. Its country and tax must equal the registration's.
- Type the First day and Last day, for example 2026-07-01 and 2026-09-30.
- Confirm.
The return opens as a Draft with a number (for example VAT-0001) and version 1. The rail at the top shows Draft, Prepared, Reviewed, Approved, Submitted, Acknowledged.
Steps: prepare
- Open the return.
- Press Prepare.
- Read the Boxes tab, then Reconciliation.
- Open Source lines (n) to see each document line and the box it counts in.
The smart buttons show Payable / Refundable, Ledger difference and Lines.
What prepare does
It reads every posted taxable line in the period, sends it to the matching boxes by treatment, place of supply and side, and totals each box. Credit notes reduce the boxes. A snapshot with a SHA-256 hash is kept. Nothing is typed: attempting to send box amounts gives 'Box amounts come from the posted documents. Correct the documents and prepare again.'
If a refund was due on the previous submitted return, it is carried forward and reduces the payable here.
Worked example
Q3 documents:
| Document | Net | Tax |
|---|---|---|
Invoice (SR) | 1,000 | 50 |
Credit note (SR) | 100 | 5 |
Vendor bill (SR, recoverable) | 400 | 20 |
Reverse-charge bill (RC) | 1,000 | 50 output and 50 input |
Output tax = 50 - 5 + 50 = 95.00. Recoverable input = 20 + 50 = 70.00. Payable = 25.00 AED. If the previous return was a refund of 3,000.00, it is carried forward and the payable reduces by that.
Check the reconciliation
The Reconciliation tab compares the return's output and recoverable tax with the tax accounts in the ledger. The Ledger difference should be 0.00. A difference appears if a document's journal was edited or a manual tax journal was posted.
If the difference is more than the form's tolerance, approval is refused: 'The return differs from the tax accounts by <x>. Explain the difference before approval.'
Steps: explain a difference
- Open the return in Draft or Prepared state. If it is already Reviewed, a reviewer presses Send back first.
- Press Explain difference.
- Type the Explanation (up to 1,000 characters).
- Prepare again.
A return that is Reviewed must first be sent back: 'Send the return back to draft to change it.'
Blockers
The return shows a banner 'Cannot be approved yet: ...' for reasons such as:
- 'n posted lines carry no tax code and fit no box.' Fix the documents (they are listed under Source lines), post any corrections, then prepare again.
- 'Registration <CODE> does not cover the whole period.' Fix the registration dates.
- An unexplained ledger difference (above).
Refusals
| Situation | Message |
|---|---|
| Period overlaps another return | 'VAT-0001 already covers part of this period. Amend it instead.' |
| Last day before first | 'Give a period: its first and last day.' |
| Draft registration | 'Choose an active registration of this company.' |
| Edit an approved return | 'An approved or submitted return is not edited. Amend it: a new version is linked to this one.' |
Good to know
- Prepare again recalculates everything and gives a new hash. Do it after posting more documents.
- When the Tax groups feature is on, a group registration includes each member company's lines only for the dates it was a member.
- Check Tax > Overview for lines without a tax code before the period ends.
- Next step: Review, approve and submit.