Tax experts have warned that VAT comes at a cost and exposure to penalty if not administered appropriately. The UAE’s companies and traders will need to factor in the likelihood that their books will be subject to additional scrutiny by tax authorities.
According to the UAE Ministry of Finance, businesses will be required to restructure their operations, financial management and book-keeping, technology, and human resource mix, in order to prepare for VAT.
Depending on how frequent the process is, companies will need resources based on the complexity of their operations; bearing in mind that VAT is not only a finance issue but flows through all operational departments of the company.
Companies need to be mindful about not only their own readiness, but also that of suppliers and other external agencies. This is because the company will pay VAT and capture documentation wherever it sources products or services to be able to claim refunds.
Businesses will also need to consider revamping their IT systems to automatically calculate and add VAT to invoices.
Hiring new staff should be a clear and present consideration as well to help UAE business owners prepare for implementation of the imminent roll out of the tax.
Well-planned change management and implementation will be critical to a company’s success in implementing VAT.
This is where UK VAT expertise can play a vital role in streamlining various business operational processes. The BCB is here to make the right connections between local businesses and the taxation know-how from one of the most advanced financial centres of the world.