what you need to know on vat implementation
Last Updated : GMT 06:49:16
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Last Updated : GMT 06:49:16
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What you need to know on VAT implementation

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Arab Today, arab today What you need to know on VAT implementation

Non-compliance is not an option when the law comes into effect
DUBAI - Arab Today

 As part of its efforts improve awareness on VAT implementation PwC recently put out a publication providing a general overview of how VAT works and the related operational considerations in order to assist businesses to successfully implement the tax and manage VAT post implementation.

The information is based on PwCs global collective knowledge and experiences of VAT including its work with Government and Revenue Authorities around the world, and also the firm’s networks and work with various tax authorities within the GCC. The information including some frequently asked questions is a comprehensive guide to VAT implementation.

 

Why do I need to start preparing now since the legislation is yet to be issued?

The expected date for VAT implementation is 1st January 2018. Given your business’ complexity and volume of business transactions, it could take companies a substantial amount of time to evaluate and map their business transactions. This is a critical step in the implementation project and it is something that can be started prior to the legislation. Also, reviewing existing systems would help you anticipate the size of the changes and efforts required.

 

If either part or the whole of my business falls within the exempted categories, what is the impact to my business?

 

Generally, an exempt supply means that businesses will not charge VAT to their customers. Similarly, any VAT incurred on those purchases will not be claimable. Wholly exempt businesses will not be entitled to register for VAT nor claim any VAT incurred on their purchases. Partially exempt businesses (i.e. mixed business) will be able to register for VAT and claim those expenses to the extent that it is incurred for the making of taxable supplies. This will mean that VAT incurred on common costs and general overheads (such as marketing and promotional expenses, utilities, professional fees, purchases of office furniture) will not be fully claimable.

 

What if a company decides not to change anything?

If nothing is done, there is a serious risk that the firms current business methodology will not be compliant with the new legislation. Furthermore, it might not be able to submit a complete and accurate VAT return in a timely manner. Non-compliance could lead to penalties or prosecution, whichever applies.

 

If my business is using a SAP or Oracle system which has VAT functionality, why should it worry?

Prior to making any changes to IT system, the firm would need to identify the VAT implications based on its current business model. As the system will need to be configured at transactional level, the appropriate VAT treatment must first be determined before it can proceed with any data entry and/or system onfiguration. Also the company will need to assess the business processes changes required, which are associated with the VAT requirements

source : gulfnews

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what you need to know on vat implementation what you need to know on vat implementation

 



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