Important Factors and Processes to Consider when Implementing VAT Compliant Systems

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VAT has been implemented in the state of UAE from January 1, 2018. The VAT is charged on supply of goods and services in the UAE at the standard rate of 5% baring some exceptions. VAT is a type of consumption that could be found working in a number of countries around the world. VAT can be classified as an indirect tax that is levied at each phase in the supply chain.

A number of businesses operating in the UAE have registered for VAT since the government and the authority started the process of VAT registration back in October 2017. However, there still are a number of companies and individuals that are yet to register for VAT in the UAE.

Today, we will discuss the important factors and procedures to consider for a business wanting to implement VAT into its business operations as there are number of businesses in the UAE that are still yet to be registered under VAT scheme. The steps and procedures to consider when implementing VAT into an entity’s business operations are as follows:

• Understanding the provisions of the VAT law and regulations applicable to the industry in which the company operates its business activities.
• Detailed study with regards to the business in which the company operates including the entity’s existing business model, systems, transactions process and flow.
• Review the entity’s existing contracts with suppliers, customers and other parties to learn the impact the VAT implementation will have on the business.
• Provide the entity’s staff with awareness through conducting VAT training sessions.
• Understanding the impact the VAT implementation will have on the business processes and systems.
• Registering for VAT through the online portal.
• Allocating duties to employees with regards to VAT related activities
• Provide guidance to the employees and software team.
• Making changes to the current accounting system and processes in order to ensure that entity’s system and processes are VAT compliant.

Push Digits has a separate division for dealing Tax affairs of clients including VAT implementation in the UAE. We provide support to our clients by conducting various VAT awareness programs/training sessions/ workshops/seminars, advising customers regarding the impact VAT will have on their business, supporting clients with regards to implementing VAT in their business, registering businesses operating in various industries for VAT and assisting business for filing VAT returns.

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