Are you ready for VAT?
19th October 2017
With less than two and a half months of 2017 remaining, organizations across the GCC need to ask themselves the question: Are we ready for VAT?
In a survey carried out by global auditor E&Y earlier this year, the results showed that only 11% had looked into the changes that were needed in their operations and IT systems.
In another survey carried out by an HR consultancy, the results showed that only 26% of companies were looking to hire someone into their business who had the experience to manage the new VAT implications.
There seems to be two mindsets to preparing for the introduction of VAT:
Wait and hold out for the specific details or make preparations internally in order to manage it effectively and avoid the heavy fines that will accompany those who are not compliant.
I know which camp I’d rather be in.
The facts we know are out there for all to see:
- VAT will be implemented from 1st January 2018 at 5%
- Companies in the UAE that report annual revenues of over Dh3.75 million will be obliged to be registered under the GCC VAT system
- Where you are engaged in the supply of goods or services that are subject to VAT (including at the zero rate) you will be entitled to reclaim VAT you incur on costs. Where you are engaged in activities that are exempt from VAT and you cannot reclaim VAT incurred on costs, VAT will be a cost to your business (as suppliers will charge VAT that you cannot reclaim).
The exciting thing about the change in GCC tax law is the vast amount of opportunities now available to talented Finance and Accounting professionals with VAT experience.
As a proactive consultancy, Kemistry are happy to have discussions with any company who may be interested in looking for new talent within Finance or Accounting who have experience with VAT.
Feel free to reach out.