The United Arab Emirates (UAE) has proposed implementing Value Added Tax from 1 January 2018. A new tax office, the Federal Tax Authority, has been established by Federal Law 13 of 24 October 2016. This body will be responsible for the role out of VAT, and local laws on other taxes, too. It will manage the VAT registration and returns processes. Aside from launching the new consumption tax, the new Authority will co-ordinate VAT harmonization amongst the other Gulf states in the GCC single market. Source: UAE VAT 2018
According to surveys not many businesses have an adequate accounting systems to deal with VAT. Besides that lots of businesses lack the VAT knowledge of how a VAT works. Investments and training are needed to be ready in time.
To get VAT ready the following actions should be considered.
- Assess the business impacts
- Amend IT systems and business processes to the new situation forecasted and
- Review existing contracts and set rules for new contracts