MIDLANDS companies with operations or business interests in the UAE, and other countries in the Gulf, are being urged to be ready for the introduction of VAT next January.
Moore Stephens, the Top Ten accounting firm, is advising clients across the region on the potential implications of the introduction of VAT in the Gulf Cooperation Council (GCC).
VAT is expected to be introduced with effect from 1 January 2018, meaning businesses trading within the GCC have less than 10 months to prepare for the significant changes.
Terri Bruce, tax director at Moore Stephens, said: “It has been announced that the UAE will introduce VAT at five per cent in 2018, and the UAE and other countries across the GCC are expected to ratify treaties imminently.
“There’s now less than 10 months to be ready for these significant changes and we’re advising a lot of companies in the Midlands who have operations in countries in the GCC to be ready.
“The new rules have crept up on a lot companies and will be in force before we know it, and it’s important to be prepared as soon as possible.
“The amount of work required for each company will depend on the size and complexity of a business and it is essential that businesses consider the impact now and determine how best to deal with it.”
Each member state in the GCC is expected to issue its own national VAT and exercise tax legislation. Businesses will then be required to charge, collect and pay the tax over to the authorities.
Terri said there are many potential issues businesses trading within the GCC need to be aware of.
“While VAT is charged and collected by businesses on behalf of the government and as such should not be considered as a cost, there will be an additional burden in terms of administration and compliance with the new legislation,” she said.
“Businesses will need to amend systems, processes and procedures and will need to ensure they comply with the new requirements.
“This extends to charging VAT on supplies at the correct rate; calculating VAT deductible on purchases; calculating the overall net amount of VAT to pay or refund, along with submitting VAT returns, showing the required information.
“It is expected that there will be a penalty regime applicable in cases of errors made, so it is vital businesses have the right systems and procedures in place and to seek professional advice if in any doubt.”
Find out more at www.moorestephens.co.uk