The Value added Tax, commonly called VAT in business parlance, is the most common type of consumption tax levied on goods and services.
On 1st January 2018, VAT will become an integral part of businesses in the UAE, as already announced by the UAE Ministry of Finance. While offering limited exceptions to some categories including basic food items, healthcare and education, Value Added Tax will be collected at the rate of 5 % on the goods and services, at each step of the supply chain.
The new VAT system will be implemented across the GCC countries, although possibly on different dates, at different rates.
Challenges To Business
Though viewed by many as just an accounting challenge, the new VAT system has a pervasive impact on the way you do business. Identifying the impact of VAT on costing, product pricing, cash flow, procurement and supply chain and implementing the essential changes in the current IT framework, accounting and financial reporting programs are the major challenges to face while ensuring compliance with the new regime.
New operating models will have to be adopted. Employees will need comprehensive training to enhance their skill sets for the same.
Morison Menon - Helping You Be VAT Ready
Our experienced taxation team with exposure to different tax regimes in the Middle East, Sub Continent and Europe is capable of advising and assisting businesses in the region to improve their systems and processes.
Evaluate & Plan
Business Impact Assessment – Mapping of existing systems and identifying key VAT touch points.
Review of key documents like existing contracts and incorporation of VAT clauses in the existing and new contracts and related documents.
Training sessions to create an organization-wide awareness and preparedness on the effect of VAT implementation
Design Develop & Train
Advise, develop and assist in restucturing transactions, supply chain and other related processes
Advise and support for requisite changes in the IT systems and applications.
Train and equip the key personnel.
Implementaion & Compliance
Assist in VAT registrations and in the preparation and filing of VAT returns.