Businesses must be proactive about VAT
Sage convened prominent tax experts and company representatives at its Sage Sessions to examine the readiness of the UAE’s companies for the introduction of value-added tax (VAT) in January 2018.
The event highlighted the need for businesses to be proactive rather than reactive in VAT preparation.
Themed ‘Are You VAT-ready?’ the sessions drew the attendance of more than 150 participants from diverse industries. The event featured a panel discussion aimed to demystify VAT and demonstrate how technology can facilitate the compliance process. Panellists included Mansoor Sarwar, Director of Technical Services and pre-sales at Sage, Pierre Arman, Market Development Lead for Tax and Accounting at Thomson Reuters, Mirza Farrukh Baig, CEO of Lynchpin Training, and Harsh Bhatia, VAT Manager at Grant Thornton UAE.
VAT compliance requires significant changes to processes and systems, as well as getting employees trained. Companies are rushing to get their accounting and business systems ready and there is still time to understand VAT, assess its impact and implement relevant adjustments in an effective and controlled manner, according to Sarwar. The right support and technology can drive efficient implementation and ease the administrative burdens of VAT.
“If the lack of time is an issue, companies can also consider gradual implementation of VAT-readiness in various stages. For example, the immediate need for businesses is to have a VAT registration number and a VAT-compliant invoicing system in place, while the rest such as returns-filing and getting ready to claim refund or tax audits can be managed later,” Sarwar added.
Warning against common mistakes businesses make when preparing for VAT, Arman said, “The journey to VAT compliance does not end on 1 January 2018–companies need to plan for the long term. Another grave mistake is assuming that authorities might delay VAT implementation at the last minute or that they might be lenient in the first tax cycle. The safest solution is to be proactive and prepare on all fronts.”
In the coming months, Sage will be hosting a series of events for companies of all sizes across key markets in the GCC region, such as the UAE, Saudi Arabia and Oman. These workshops will provide a more in-depth understanding on the impact of VAT on businesses and how to utilise technology for VAT-compliance.