Building better business Globally
VAT is about to mark the beginning of a new era for the Gulf Cooperation Council (GCC) countries by bringing in a fundamental shift in the countries revenue collection. As the GCC member states are to adopt Value Added Tax (VAT) on 1 January 2018, companies are on a limited timeline to prepare for the first phase of VAT implementation. In this point of time, regional businesses are scrambling to determine exactly what they can do now to prepare for VAT. In the countdown to VAT implementation, companies should consider taking some simple steps now to keep abreast of their obligations, which are discussed over here.
VAT affects almost all the transactions and touches every aspect of the organization. It’ll possibly affect IT systems, finance, human resources, legal teams and even inter-organization transactions. So, prepare a detailed project plan and secure the necessary internal and external resources. Also, ensure the stakeholders in the business are well-informed on the same.
This is a key step to set the foundation for the VAT implementation. Businesses need to carry out an impact assessment to understand VAT and its commercial effects, prioritize issues and prepare in the best possible way for the implementation. Impact assessment would include assessing changes required to the ERP systems, product pricing, ongoing and long term contracts, supply chain, working capital etc.
Perform due diligence on your existing contracts. Continuous contracts which may be ongoing even after 1 January 2018 and also company’s standard long term contracts need to be analyzed if you need to consider making an amendment to any provisions in these contracts, and/or to any standard terms of your business.
Due consideration should be given as to monitor if any relevant agreements now include specific warranties, obligations, and indemnities, in connection with VAT.