VAT IMPLEMENTATION
VAT Implementation
The concept of Value Added Tax (VAT) evolved in the 20th century and was enacted by many European countries by 1960s and 1970s.
Moving ahead, the developing nations started adopting the procedure by the 1980s. It is a multi-purpose sales tax that gets paid at the point of purchase.
We can illustrate the entire ‘value added’ concept in a simple equation:
Value Added = Value of Output – Value of Input
Today, more than 160 countries are registered under the tax, and the global average tax rate is 12%.
Introduction of VAT in UAE
The UAE is a part of the GCC countries. The GCC finance ministers confirmed a provision for GCC VAT Framework Agreement by Dec 2015.
In Jan 2016, the UAE financial minister confirmed that the VAT framework will get implemented by 2018.
The countries entered into an agreement to implement the VAT in its states with an aim to diversify the sources of revenue.
GCC VAT implementation is based on a multi-jurisdictional single market regime and finally, the UAE VAT implementation took place on 1st Jan 2018, with a rate of 5%.
Most consumer goods and services like automobiles, fuel, jewellery, food & beverage, restaurants, entertainment, etc. are charged at this rate.
Other categories like health, education, transport by sea or air, etc. are zero-rated; and still others like local passenger transport and bare land are exempt from VAT.
We can provide a set-up of a simple accounting systems and implementation of VAT rules:
- Assist with the VAT registration
- Identification and analysis of the VAT impact on your business
- Analysis of IT system and accounting requirements
- Preparation and filing the VAT returns
- Assistance in claiming VAT refunds
Value Added Tax
Our Taxation experts can perform VAT impact assessment and structure your business in the most tax-efficient manner with respect to the utilization/refund of input VAT and in accordance with federal tax authority’s requirements
We Help
All businesses will require in maintaining their books of accounts and will have to do audit for financial statement for tax purpose. We help you in managing all matters of VAT and taxation. We, at E & S Chartered Accountants, follow the professional approach in planning and executing the audit assignment.
Our Process
E & S Chartered Accountants has a team of tax specialists who can help your business structure in-house recording and filing processes to ensure that your company does not incur any penalties from improper compliance. We will help you identify the potential financial challenges you might face in the implementation of VAT. We can also assign you a dedicated VAT consultant to update you on the latest developments regarding the legislation.
Evaluate & Plan
Business Impact Assessment, review of key documents like existing contracts and incorporation of VAT clauses in the existing and new contracts and related documents.
Design Develop & Train
Advise, develop and assist in restructuring transactions, supply chain and other related processes, Advise and support for requisite changes in the IT systems and applications.
Implementation & Compliance
Assist in VAT registrations and the preparation and filing of VAT returns. Align compliance practices with VAT requisites.