Although there are less than 4 months until VAT will be introduced on January 1 2018, many businesses have yet to implement a VAT action plan in preparation, and therefore risk exposing themselves to financial penalties. In this blog, Mohammed Siddiqui, Managing Director of Advisors M.E., discusses the latest developments of VAT and identifies the key considerations for businesses in the UAE, Saudi Arabia, and GCC.
“Everyone in the business will be touched by VAT”
VAT will almost indefinitely impact every area of every business, and it is likely that the day to day tasks of any companies’ personnel will change as a result. The first thing to consider therefore is how to train and prepare staff for these changes; whether it’s the IT technician updating systems to record VAT on transactions, the accountancy clerk who has to identify recoverable VAT on purchases, or the HR team who have been charged VAT on their recruitment ads.
Understand how the VAT rules apply to your business
As we’ve already mentioned, VAT will impact every area of any business, but it is imperative to understand exactly how any changes bought about by the introduction of VAT will apply specifically to your company. Here are some starting points to ensure a smooth VAT transition:
Consider outsourcing your company’s VAT function
The introduction of VAT in the UAE in 2018 will undoubtedly bring about a number of additional complex tasks for businesses; Identifying, recording, reclaiming, and paying VAT. It is important to recognise as soon as possible if your business lacks the capability within its existing systems and resources to handle these tasks. In this instance, organisations should consider seeking advice from a taxation expert, in order to ensure that they meet their legal obligations.
Be prepared for changes and updates
Some aspects of the VAT system have yet to be clarified, and we have yet to understand what the tax return will look like. With a matter of less than four months though until VAT is introduced in the UAE, companies need to be prepared for the fact that any changes are likely to happen very quickly. For example, last year the Italian tax authorities gave companies just 48 hours to comply with changes in VAT regulations. Could your company’s systems react quickly enough?
100 Day VAT Challenge – get your action plan now
Over the next 100 days, we’ll be challenging your business to get VAT ready, and sharing useful articles, tips and advice for all companies preparing for the introduction of VAT. Advisors M.E. offers a cost effective service to any company needing help with VAT in the UAE or Saudi Arabia, as well as assisting with business valuations, corporate finance, investment management, accountancy services and strategic financial planning.
Mohammed Siddiqui is Managing Director of Advisors M.E. and began his corporate career with Deloitte and Touche. He has over 20 years’ experience of helping businesses of all sizes across the MENA region. For further information on how to get ready for VAT in the UAE and Saudi Arabia, contact Mohammed on firstname.lastname@example.org, or call a member of the team on +971 7207 6683.
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