VAT ACCOUNTING

VAT ACCOUNTING






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PREPARATION

Map out obligations related to local VAT rules and regulations. Identify and analyze the impact VAT has on your business. Review and amend your contracts with customers and suppliers. Adopt your business processes, bookkeeping, HR and IT systems to avoid net VAT costs and penalties.

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IMPLEMENTATION

Maintain books and records in the appropriate manner ensuring that the accounts payable record VAT inputs that are paid and recovered where permitted as soon as possible. Ensure that the accounts receivable reflect and charge VAT outputs appropriately at the correct rates. Update invoice templates to ensure that all relevant information for VAT is included.

REPORTING

Register for VAT with relevant government authorities and obtain your VAT number. Prepare and file VAT returns in accordance with approved processes and practices. Claim and receive VAT refunds on a timely basis. Make use of available VAT exemptions and special treatments on imports and exports. Be up to date with changes in VAT regulation.

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FAQ


What is VAT?

Value-Added Tax or VAT is a tax on the consumption or use of goods and services levied at the point of sale.

When VAT will go into effect?

VAT is introduced in all GCC member states – UAE, KSA, Kuwait, Bahrain, Qatar, Oman – on January 1, 2018.

What is VAT rate?

VAT will apply to goods and services at the standard rate of 5%.

Who needs to register for VAT?

Businesses which provide taxable goods or services with annual revenue of more than AED 375,000 UAE and SAR 375,000 equivalent will be required to register for VAT.  

How do I administer VAT?

All businesses need to document their transactions, including income, costs and associated VAT.

Invoices

Include VAT in your invoices at appropriate rate.

Accounts

Charge, pay and recover VAT with Accounts Payable and Accounts Receivable.

Reports

Record and file financial reports with VAT included.