According to the Ministry of Finance in the UAE, 5% VAT will be implemented on consumption of various goods and services with effect from 1st January 2018 while other countries of the GCC region may implement VAT from 1st January 2019. However, there are some exemptions on basic food items, education and healthcare. The VAT authorities will thus be administering, collecting and enforcing VAT taxes. After performing tax audits, if they find non-compliance of tax law, they will be administering penalties as well. The VAT tax would basically be levied on selected items such as energy drinks, tobacco products and others as per the legal framework of taxation to be levied by the UAE government. In this regard, the government has also started conducting awareness campaigns for spreading knowledge about VAT and the tax implementation. There are many companies in the United Arab Emirates that offer cost effective VAT services to assist the companies in handling VAT related documentation.
Other than this, a number of companies also offer VAT training to the employees of private and government organizations to make them efficient in handling VAT related issues. Businesses including entrepreneurs, individuals and small businesses can benefit from this training. The new taxation system designed by the UAE government will have a great impact on the social and economic development of the country. Further to this, it would be of huge boost up in the country’s revenue that was hit by the falling oil prices. According to the Ministry of Economy, VAT system would lead to Dh 12 billion and Dh 20 billion in the first and second year respectively. To ensure that the companies are ready and prepared for implementation of this new system, they can avail VAT services from various service providers located all over the UAE who can assist them in filing tax returns and adapting to the new taxation system.
The VAT services offered by the UAE companies including providing training to the clients and assisting in various operations related to VAT. Business owners, corporate firms, finance professionals, accountants and auditors are some of the clients that avail VAT services at cost effective prices. Under the VAT training services, the service providers can train the employees of clients either in the training campus or in the client’s office. The course content of VAT training varies depending upon the structure and needs of the organization. It involves training the finance and account personnel on how to apply the concepts of VAT and about the procedural formalities required to file the tax. On the other hand, VAT implementation services include providing full support to the companies on all the VAT related operations such as understanding requirements, VAT registration, analysis of VAT impact on business and managing the process of VAT transaction.
First of all, the VAT service provider visits the office of the company seeking VAT services. They understand the business model of the company, its complete structure and accordingly, they design the right VAT implementation plan that fits in the company business model and is suitable for regulating VAT on the business. Also, they can suggest whether the company is exempted from VAT or not and provide guidance on the date when VAT registration can be done. After this, they assist with all the documentation and related formalities in compliance with the law. Apart from this, they also do analysis of the impact of VAT on the business including analyzing profitability, cost and the working capital. In order to manage the complete VAT transaction process, the service provider assigns a responsible team member to manage the whole project effectively. They assist in preparing invoices, scrutinizing the accounting system and finally in the filing of VAT return.