04 Understanding VAT
07 VAT on Cross-border transactions
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CA Narasimha Murthy, HLB Hamt on how the new taxation law will impact imports and exports in the region.
08 VAT and IT
Vimal Rama Chandran, HLB Hamt, explains the importance of IT in helping UAE businesses to be VAT compliant.
An early assessment of the possible impact VAT will have on different industries.
08 Are you ready for VAT?
Jay Krishnan, HLB Hamt, gives a lowdown of the latest updates on VAT.
11 HLB VAT services
Sumesh Krishna discusses how HLB Hamt can help businesses effectively adopt and implement VAT.
Message from the Managing Partner
John Varghese Managing Partner
The Nuances of VAT The spectre of value-added tax (VAT) is looming large over the GCC countries, as we brace for the introduction of this new tax regime at the beginning of 2018. A GCCwide VAT of 5 percent is expected to raise GDP by 1.5%-2% across the region, and it is vital to the economic diversification strategies of regional governments.
It is imperative that companies in the region analyse the impact of VAT on their businesses, customers and suppliers. First off, businesses should understand individual country frameworks and legislations when they are introduced. Finance teams will have to change the way they
operate, and understand the system changes required to ensure a smooth VAT roll-out and reduce the risks of non-compliance. HLB Hamt, on its part, is committed to raising VAT awareness and help our clients map out their VAT capability, in addition to setting up training programmes to simplify the complexity of compliance. We have dedicated this issue of Insight to VAT and our in-house experts dissect the impact of indirect taxation on different industry verticals, and give you as much insight as possible to develop a VAT strategy that makes sense for your business. We are ready to help you navigate the complex VAT landscape and avoid the pitfalls.
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Though the legislation is not ready yet, businesses in the region now have less than six months to build a roadmap to transition to VAT and make sure that they have the systems, processes and technology in place to implement VAT. Are you confident that your company is prepared?
From an economic perspective, the introduction bodes well for the countries in the region as they diversify from oil revenues, and this is a sign of growing fiscal maturity in GCC. At the same, VAT is expected to have a far-reaching impact on every business, and there are a number of steps every organisation must take to make sure they are ready when it is introduced.
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An early assessment of the possible impact VAT will have on different industries
HOSPITALITY INDUSTRY The hospitality industry is a broad category of fields within service industry that include lodging, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. How would VAT apply on each individual element in the travel and tours services industry, which include airlines, travel agents, tour operators, accommodation and other local service providers etc? What will be taxability of services rendered by agents? And how would place of supply be determined in such cases? In the case of outbound travel services, supply of food and drink on international journeys would be treated as exports, and therefore taxed to zero VAT. However, conditions might apply for exemptions and value issues could also arise especially when supply of food in bundled with supply of services. How would ‘no shows/cancellations’ be treated? Would VAT still need to
be paid? In Australia recently, in the Qantas judgement it has been held that in such cases it would still amount to a supply and GST is payable. Now it remains to be seen whether the VAT law in the region will take a similar stance. If yes, can supply be said to take place if the actual service itself is never rendered because the passenger did not show up or cancelled the booking? Or what would be the point of taxation in the case of bookings made before the VAT law comes into effect and the actual service is rendered under the Law? Further complexities could include when money is received/ invoices are raised before or after implementation of VAT, and effect of cancellations made on such revenues. These could result in accounting and reporting issues. If the tour and travel service is a bundle of services, then planning on how to optimize vendor VAT and how VAT can be reduced within the ambit of the law is another key question. Tour and travel service providers will have to
break up their revenue and costs, and clearly examine which of them would be subject to inward VAT and outward VAT. MANUFACTURING INDUSTRY For manufacturing industry the proposed VAT implementation requires an exercise to be carried out in working capital management, because these are capital intensive industries. The following points could be major working capital management touch points for manufacturing companies before and after the VAT implementation: • In view of implementation of VAT, the industry could face an increase in pre-orders or a requirement to complete the scheduled line manufacture and delivery before the agreed date. This would help customers to reduce their inward supply costs by 5%. Flip side of this could mean a lot of request for the manufacturers to meet revised schedules. This could have a potential
to align their business processes to identify each such ‘supply’, in the entire supply chain until the goods are sold to a third party. If the manufacturing company is making purchases from other GCC countries and from countries outside of GCC , currently what is the tax paid versus what would be the tax payable under the VAT regime? Whether the purchase from GCC countries be treated equal to an import or would it be treated as a purchase on which reverse charge is payable? In either case what would be the credit eligibility on VAT/import duty paid? This could impact output product costs and as such customer demands may fluctuate; either demand could be accelerated or staggered and this in turn could have an impact on inventory management and overall working capital management. A positive or negative impact would have immediate cash flow implications.
transferred to branches where it can be used to set off against output VAT. • Identifying current expense items which would become creditable under the VAT regime is an exercise, which would need to be done. This would help ease the burden of output VAT causing an increase in selling prices. Manufacturing companies would also need to study which of their customers will be claiming credit of VAT charged to them on purchases of goods as against those customers who will not be able to claim credits. Sale of goods where prospective credits will not be available could see an initial dip whereas sale of goods where credits can be claimed further on in the value chain may not see a change. Liability to pay VAT will also arise at the ‘time of supply’ - when the supply is deemed to have occurred. ‘Supply’ has been widely defined, to include even ‘supply’ with no consideration in specified circumstances. For example, branch transfers, free supplies, etc. Given this, the manufacturer will need
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cash flow impacts especially if additional costs are incurred to meet the slashed deadlines. • In view of the implementation of VAT, it would be worthwhile to review which of the input purchases can be staggered into the VAT regime so that VAT can be paid on the purchases and claimed on the outward supplies. This would help in controlling increase in product costs. A cost benefit analysis would have to be done and this would also need to be weighed against the anticipated increase in demand for Pre VAT purchase of goods by customers. • If the manufacturer is based in a country different from the customer, the impact of VAT will change. In this case the input credit on inward supply would accumulate in one country and the VAT would become payable in another country. In such a scenario an analysis will have to be done of (a) how to claim offset of credit or (b)whether refunds can be claimed or (c) whether credits can be
CONSTRUCTION INDUSTRY The VAT law is proposed to be introduced from 2018 onwards and there would be many projects, which would be due for delivery over the next few years. This means contracts that started in the pre-VAT era would be concluded under the VAT regime. These projects would not have included the VAT component, credits, etc in the costing structure. The burden of VAT (after setting of credits if any) will have to be borne either by purchaser or vendor. This could have a major cash flow impact and whether the transition provisions will enable these pre existing contracts to be carried forward into the VAT regime without being impacted by VAT remains to be seen. In such a scenario, what would be the basis on which such transition would be allowed? Will it be (a) percentage of the project that is already completed before the VAT regime? (b) Or a date by which the project should have been started which would indirectly indicate what percentage of the project would be
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completed by the time the VAT regime is implemented? At present, these criteria can only be an educated guess. Currently, subcontractors are not registered. Under the VAT regime also many small subcontractors may not be required to be registered if they fall within the minimum registration limits. This would mean that at their end these subcontractors will not be able to recover any VAT credits on payments made by them to their vendors. This would also result in an automatic increase in their output product costing, which in turn would impact the main contractors. How the current agreements with such contractors will have to be adjusted to cover this risk needs to be analysed. Whether it would be better to get such subcontractors to register and therefore be eligible to claim VAT credits at their end and as such pass on the benefits of subsidised costs to the main contractors also need to be analysed. However, one aspect which will be critical in such deliberations is who would absorb the increase in compliance costs incurred by the subcontractor. Can the increase in compliance costs can be built into the product costing and recovered in this way by the subcontractor? In such a scenario it would be better to do a over cost benefit analysis to examine what would be the final position in terms of overall benefits by getting the subcontractors to register under VAT vis-a-vis allowing them to continue as unregistered businesses will have to be examined. Since the construction sector operates on thin margins - claiming of credits to the maximum extent possible and to prevent situations where excess tax is paid due to credits under claimed or accumulation of credits which is not recoverable would be issues to be watched out for. Claiming of refunds wherever credit accumulation has happened (dependent on eligibility criteria) is another activity which will have a cash flow impact; LOGISTICS Under the VAT laws, Logistics would be considered as a supply of services.
Upfront Pricing to customers will undergo a change as VAT will have to be additionally recovered from customers. Impact of this additional tax can be measured by analysing eligibility to credit of VAT charged. If VAT is non creditable to the customers, then the customers may negotiate for pricing changes and in such a case the logistics companies may have to claw back all possible credits at their end so that they can pass on the benefit of the lower net VAT paid as a factor of services costing to the final customers; From customers perspective, under the VAT regime all supplies of goods would become taxable; it is proposed that branch transfers would be made taxable. In view of this customers may choose to change their business structure and supply chain. In such a case the logistics model would also undergo a change. This would have a direct impact on the logistics business revenues. Change in customer needs may require logistics companies to invest in new routes/setting up of warehousing hubs in different locations or shrinking warehouse operations/ re routing/ reducing fleet size to match customer requirements. This could result in additional R&D costs, admin costs and impact revenues as well. Implementation of VAT on intraGCC transactions could also result in increase in documentation and compliance costs. To off set the impact of output VAT payable, eligibility of set off of credits has to be examined in detail. Requirements for documentation may arise under the VAT law to establish or prove the movement of goods. This additional compliance could also result in additional costs; To reduce the impact of VAT on customers, the logistics companies would have to examine their inward VAT supply chains for opportunities to maximise talking credit of VAT paid on the inward supplies. RETAIL INDUSTRY Retailers that are required to register because they exceed the VAT registration threshold are required to account for VAT on their sales. That
is, they are responsible for collecting the VAT and paying the net amount of VAT that they collect to the Taxation Authorities The VAT will have to be borne by the end consumer. But the essential question is whether the entire burden of the VAT can be factored into the cost of product and passed on or whether only a portion of such costs after set off of input VAT credits only should be passed on. The decision to pass on the full costs to the final customer may have to be weighed in terms of any anti-profiteering provisions which may be introduced. A case in point is India, where the proposed GST law has anti-profiteering provisions built in, which are aimed to ensure that over a period of time the benefits of Increased credit flows under the GST law are passed on by the businesses to the customers in the form of reduced products/services prices. This question may also require the retail business to do an analysis of the types of customers they have and bucket them into (a) customers who can claims input VAT credit (b) customers who cannot claim any input VAT credits. Based on this a grouping of products could be done to see what will the price increase on account of VAT and what would be the fluctuation in demand for these products based on the increase in prices owing to the VAT factor. Another key aspect to consider is the declaration of product prices â€“ whether inclusive of VAT or VAT extra? Will the prices be suitably increased to buffer for the inclusive VAT or will the VAT be absorbed by the retailer? VAT will also have an impact on discount schemes. For free products offered with a particulat purchase, valuation issues would also arise and there could be a credit reversal required. In case of schemes, how the VAT accounting has to be done, compliances, etc would be an additional cost for the retail businesses. All of these would have a bearing on product costing and ultimately profitability.
VAT ON CROSS-BORDER TRANSACTIONS The impending implementation of the unified ValueAdded Tax framework across the GCC will bring significant changes to business operations in the region, including cross-border transactions. CA Narasimha Murthy, Manager – Audit & Assurance, HLB Hamt explains how the new taxation law will impact imports and exports in the region.
Intra-regional trade across the six member states of the Gulf Cooperation Council (GCC) has grown by leaps and bounds since its establishment in 1984. According to a report released by the GCC Secretariat General, the volume of trade between member countries rose to $115 billion in 2015. Furthermore, the report also revealed that the GCC’s total trade with the rest of the world was over $1.19 trillion in 2012. VAT, which will be introduced in the GCC from the financial year 2018, is an indirect tax applied to the consumption of goods and services. It is levied by registered businesses and is applicable to all imports and exports. It will apply to most supplies of goods and services and this may be at a standard rate (5%) or at a zero rate (0%). With the impact it will have on the regional supply chain, it is essential for the business entities in the UAE to understand how the new taxation rules will impact on their businesses. Here are the key things, which every business man needs to know:
In accordance with VAT regulations, export refers to the transfer of goods or services to a non-GCC country. Export of goods or services are taxable at zero rate. Input VAT incurred in the process of manufacturing exportable goods or services are recoverable. This means VAT paid by a company on purchase of raw material which was used for producing exportable goods eligible for refund. In order to claim VAT refund, the companies have to declare export transactions and present related documents such as invoices and bill of lading to the competent Tax Authority. The Federal government is expected to issue further guidance in due course regarding the period of time within which businesses will be reimbursed their recoverable input tax.
Purchase of goods or services from another GCC member state is called as ‘Acquisition of goods or services.’
In case of an acquisition, the buyer will account for VAT (as output VAT) on the value of the goods or services required based on the destination of the place of supply, unlike a normal sale transaction where the seller will charge VAT on the sale value and buyer will pay the VAT. For example, VAT registered firm Company A in the UAE purchases goods or services from Company B in Oman, which is a GCC member state; Company A will be charged with VAT on the value of the items it acquired and liable to pay the VAT to the UAE government.
Where goods or services are sold/ dispatched by VAT registered trader to a Customer within the GCC countries (but outside UAE), that transaction is called as ‘Dispatch of goods or services’ Goods or services shipped to other GCC countries are taxable at zero rates. However, the UAE VAT trader should obtain the recipient’s VAT registration number prior to the transaction in order to be eligible for zero rate tax. In the case that the recipient is not VAT registered or is unable to provide the VAT registration number, tax will be charged by the trader on the dispatch transaction. While VAT will apply to most goods and services, there are some likely exceptions: this includes basic food items, essential medicines, and education; lease of residential property and finance and insurance.
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Goods or services that are imported by a company or individual from a non-GCC country, whether they are registered under VAT regulations or not, are charged with VAT upon its entry into the UAE. The process of importing goods from a country outside any GCC state follows a reverse charge mechanism (RCM). RCM is a mechanism under which the receiver of goods or services is required to pay VAT instead of the supplier of goods or service. VAT will be payable to the government
where the goods are shipped to. For example, Company A in the UAE imports goods or services from Company B in Germany, which is a non-GCC country, then Company A is required to charge VAT and pay to the UAE government. With the aim to promote exports, the GCC VAT rules indicate that where the imported goods are transshipped to another member state the transaction shall be exempted from VAT.
ARE YOU READY FOR VAT? Jay Krishnan, partner, HLB Hamt, gives a lowdown of the latest updates on VAT and shares foundational information on how organisations can better cope with its impending implementation.
The unified value-added tax framework in the GCC has now been signed by all six countries in the region. It is understood that the framework sets out broad principles, which will be followed by all member states. However, the agreement also gives member states some freedom to adopt a different VAT treatment in respect of their respect of their individual national policies in their geography. Under the unified framework, VAT will apply at the standard rate of 5%
across the GCC. All member nations have agreed to implement VAT from 1st January 2018, and by 1st January 2019, at the latest. It is anticipated that not all GCC countries will achieve implementation simultaneously as previously expected. This is because, currently, UAE & Saudi Arabia have formally announced that it will introduce VAT at the beginning of 2018. Other member states are likely to push their implementation dates to finalise their domestic legislations: in Bahrain by the middle of next year. Qatar, Oman and Kuwait have not yet made any official pronouncement on the specific timing.
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UNDERSTANDING THE BASICS VAT is a consumption tax that is levied on the value added at each stage in the supply chain. This kind of tax policy has been implemented in more than 150 countries around the globe, including all OECD nations except the US have a VAT policy or at least a variation of it. Organisations that are VATregistered will charge the taxes on the goods and services supplied to customers. They will also need to pay VAT on goods and services received from suppliers. Registered businesses can also reclaim VAT incurred on goods and services acquired for business purposes such as the purchase of raw materials and other consumables used for the purposes of business.
Now, while VAT is collected by businesses on behalf of the government, it will ultimately be incurred and paid by the end consumers. IMPORTANT DEFINITIONS UNDER VAT Goods and services
It is important to establish whether a tax payer is supplying goods or services since there are different rules applying to each for the purposes of determining where and when the supply takes place. • Goods. The passing of ownership of physical property or the right to use that property as an owner to another person. • Services. Anything which is not a supply of goods is a supply of services. Consideration
This is equalled to anything received in return for a supply. If the consideration for a supply is just in money, the value of that supply is the amount of money received. The consideration is treated as VAT inclusive, so the amount received in payment includes an element of VAT for taxable supplies. Business
Any continuing activity of making supplies for consideration. Frequency activity is vital here, activity should continue over a period of time. Isolated transactions, as well as private or personal activities, are not considered business. Supply
Only registered businesses or required to be registered for VAT will be able to make “taxable” supplies (subject to VAT). Businesses will be
required to register under VAT when their turnover reaches a certain threshold. Voluntarily registration for VAT is possible only if: mandatory registration threshold had not reached and/or turnover has reach lower voluntary registration threshold limit. Place of Supply
Place of supply rules shall be determined based on whether the supply is made in the UAE or outside the UAE for VAT purposes: • If the supply is treated as made outside the UAE no UAE VAT will be charged • If the supply is treated as made in the UAE VAT may be charged
RECORD KEEPING, AUDITING AND PENALTIES The introduction of VAT will put the onus on businesses to ensure that they religiously keep proper records and are
assessed as to the VAT liability based on those accounting records. There will also be a requirement to keep records, including invoices, for five years. The following are required to be kept to ensure accurate tax compliance: • Books of account. Any information necessary to verify entries, including but not limited to annual accounts; general ledger; sales register; purchase register; invoices issued or received; and credit and debit notes. • Additional records required for specific taxes. This includes different taxes may require different records to be kept in order for tax payers to be compliant, for example, a VAT account. In addition, it will also be ideal to keep records of any materials that will confirm the company’s liability to tax, including any liability to register. • VAT invoices. This should include the following information: - A sequential number which uniquely identifies the document - The date of issue of invoice, time of supply (only if different from the invoice date) and the name address and TRN number of the supplier - For each description, the quantity of goods or extent of services supplied, the date of VAT and amount payable in UAE Dirham - The total amount of VAT in UAE Dirham together with the rate of exchange applied and source of that rate It is expected that the UAE will introduce an electronic registration, filing and payment system. The due date for filing will be within the month following the end of the return period and announced by the Executive Regulations. Should the due date fall on a weekend or national holiday, it can be extended to the first following working day. There will be strict consequences for non-compliance and late payments, such as business closure for three days and penalties of up to 500 percent of the VAT owed in cases of fraud. The FTA is also authorised to conduct VAT audits with five days’ notice unless fraud is suspected.
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THE UAE VAT FRAMEWORK AND REGISTRATION Organisations that have an annual turnover of AED 375, 000 or higher, while companies that have a yearly income of AED 187, 500 or lower can sign up voluntarily. A federal tax authority (FTA), which is in the process of recruiting staff, will be responsible for the management, collection and enforcement of VAT policies in the UAE. The tax procedure law will be relevant for all current and future taxes, including VAT, and will set out the procedures for tax registration, collection, audits, penalties, appeals and so on. As previously mentioned, in accordance with the GCC unified VAT framework, VAT will apply at the standard rate of five percent in the UAE and all other GCC member state. The Ministry of Finance has indicated that it will be possible to register for VAT on a voluntary basis from the third quarter of 2017 before VAT registration becomes compulsory from the final quarter of 2017. VAT-registered companies will submit a “VAT return” document to the FTA on a periodic basis mentioning all output tax due and input tax recoverable for the period. Under the unified framework, each member state has the discretion of treating tax groups as a single taxable person. Although, this only applies if the ‘VAT Group’ meets the criteria
set by the government. Organisations can register a ‘group’ if each has a fixed establishment in the UAE, they are ‘related parties,’ and either party control the other, or two or more persons form a partnership and controls the others. This arrangement means that only one VAT return will be required to be submitted for the group. VAT will be charged based on the policies of the destination of the supply and import of goods and services (i.e. VAT applies where the goods and services are consumed in the UAE), with exports subject to VAT at zero rate. Goods or services that are imported by a company from a non-GCC country, whether they are registered under VAT regulations or not, are charged with VAT upon the items’ entry into the UAE. The import of goods from a country outside the six-bloc region into the UAE or any GCC state follows a reverse charge mechanism (RCM). RCM is a mechanism under which the recipient of goods or services is required to pay VAT instead of the seller, except where goods will be reexported to another GCC state. Should the goods imported to the UAE and transferred to another member state the place of supply of import shall be UAE. Therefore, the importer must pay import VAT without using the reverse charge and cannot recover this VAT. This import VAT should be recoverable in the GCC state to which the goods are transferred. With aims to promote exports, goods and services sold to GCC and non-GCC states are expected to be zero rated. Furthermore, input VAT incurred in the process of manufacturing the exported items are recoverable. This means that if the companies had paid VAT to purchase the raw materials used in producing the goods sold the UAE suppliers are entitled to reclaim their payments.
VAT AND IT
Vimal Rama Chandran, IT Manager, HLB Hamt, explains the importance of IT in helping UAE businesses to be VAT compliant.
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The imminent roll out of VAT will likely bring significant changes to the UAE business scenario. These changes will require business organizations to re-assess various commercial and operational factors to prepare for the new tax laws. In a fast-paced digital world, IT is an important pillar for efficiently running a business. The new tax policy will also require companies to evaluate the capabilities of their existing IT systems and modify it to be VAT compliant. Therefore, to operate a compliant framework for VAT, business organizations should ensure that their systems have the right solutions to
integrate tax condition rules, invoicing and documentation, reporting, and maintenance of tax data and codes. VAT will fundamentally be embedded throughout all the processes of a business’ supply chain. This means adjustments must be considered to minimize impact in the business and VAT compliance with its existing operational requirements. In some instances, this may require huge changes from their point of sale terminals, accounting systems to their enterprise resource planning (ERP) systems. A significant impact VAT has is its accruals nature, which means that it can potentially impact multiple systems. This is why it is necessary to consider the following elements when making adjustments to their IT framework: • VAT mapping of business processes and transactions to identify how different systems will be impacted; • Ensuring ERP changes reflect relevant VAT processes; • Determine the need and beneficial use of VAT specific tools such as transaction integrity checking, cash flow monitoring, automated VAT filing/ reporting; • Setting governance and controls to ensure VAT regulations and commercial systems are up to date. As a transaction-based tax, VAT needs to be verified and accounted for, and comply with documentation for each business dealings. Being new to the UAE, adapting to the VAT policies can pose multiple challenges. Among which, is change in the company’s culture, employee mindset and pricing decisions. Accountancy practitioners who are stuck in their old ways will be placed in a tight spot as the processes that they
are used to conducting may no longer be applicable. VAT reporting requires accuracy and timeliness, any slight delay or wrong detail in a report could result in significant penalties. To address this, business and finance leaders should communicate the importance and requirements of VAT and the changes it will bring to all relevant stakeholders within the business organization. They should also have a clear view on the processes needed to support the systems implementation and ensure that everyone within the company understands this to comply. For effective management of VAT and scenario planning as well as to identify capability to cater for VAT, companies need to have high level understanding of the capabilities of their existing systems such as the ERP. The process involves; • Automated tax control framework embedded in regular business processes, and • Data and analytics for vendor management and fraud detection. Configuring VAT into ERP and finance systems will be resource intensive, complex, time-consuming and potentially expensive. Therefore, it is paramount that they choose the right software that will help make VAT easier and help organizations to avoid mistakes. It is also important to ensure that the right skills and knowledge are available at all stages of implementation. Furthermore, they also need to perform proper testing to make sure that the software complements their current IT frameworks. Companies like HLB Hamt can assist organizations throughout the whole process of implementing and integrating VAT compliant systems. Once the VAT compliant solutions are deployed, training and support have to be provided so this should be planned for in advance. Organization’s like HLB Hamt can also help in terms of ensuring that organizations have a proper understanding of their systems and how it works with VAT. Business should strive for continuous improvement of the system. Automating processes for VAT compliance process can also significantly reduce the risk of error associated with manual reporting while enabling the efficient reallocation of resources to other challenging areas of your organization.
VAT CONSULTANCY AND IMPLEMENTATION SERVICES The concept of VAT is totally new to the businesses and people in GCC. And as one of the fastest growing regions among the GCC, the impact of VAT in the UAE is very significant. Value Added Tax (VAT) is a tax on transaction; each purchase or sale involving goods or services must be assessed for VAT purposes and the proper tax treatment should be applied like standard rate, “0” rate or exempted. The concept is simple in theory, but overseeing the current regulations in place and organizational structure of most of the business in UAE indicates that the implementation of VAT in their business will be really challenging. Our team is completely equipped team composing of VAT experts from
PHASE -1 Preparatory Phase Study of the current business model of the company to identify all aspects of the business which could be potentially impacted by the VAT Law.
Europe and India and specialized in all major industry segments. They are able to examine the impact of VAT in UAE on a multi-dimensional basis, and able to develop a roadmap and program of change, and testing the results for each and every business. HLB Hamt can help the business owners in; • Organizational structure assessment • VAT Technical assessment • Review of the current business process and practices • Technology assessments • Assistance to people development.
VAT Workshops Explain the VAT concepts to the Internet stakeholders such as finance team, sales team and procurement team.
PHASE -4 Registration Phase • Assistance in understanding the mandatory registration requirements • Collation and filling of the mandatory documents for purpose of obtaining VAT registration • Providing necessary clarifications additional documents in case required by the VAT authorities
PHASE -5 Post VAT Transition Phase • Review of the output data from the newly implemented VAT system and suggesting changes if any • Periodical review of VAT systems including overview of calculation and return filing
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VAT Strategy Phase • Classification of company operations into different types of supplies i.e. local, export, intra GCC etc • Valuation of VAT impact on current operations • Method of Credit recovery and documentation to support claim • Preparations for VAT compliance and filing the first returns • Existing contract review and providing recommendation
Sumesh Krishna, Partner HLB Hamt