Businesses in UAE are gearing up for Value Added Tax (VAT) as the timeline of VAT is almost around the corner i.e. 01 January, 2018. While VAT implementation itself can be a daunting task, but depending on the size of the business you can have the following 5 points checklist to check your business VAT readiness.
- (Detailed) Tax Invoice
While all VAT Registered suppliers should issue a (Detailed) Tax Invoice, however, there are few circumstances in which you can issue a rather Simplified Tax Invoice. A Tax Registered supplier can issue a simplified invoice under any of following conditions:
- VAT Compliant Accounting Software?
Is your accounting software VAT compliant? Now, who will answer you this question? Almost all off-the-shelf Accounting Software of modern age would have the VAT module. Hence do not jump to change the software as may be you have not yet activated the VAT module and taking advice from your VAT consultant can save you time and money. However if you have a custom-build accounting software then chances are that it may need to get upgraded.
- Accounting Documents Got Modified?
There are few key accounting documents which need to be re-formatted and modified to make you VAT ready. These docs includes
-Purchase Recording Documents
-Purchase Orders (if applicable)You need to ensure that all the above docs should include your Tax Registration Number (TRN) and other necessary VAT related information.
- Have you Reviewed the Buying & Selling Procedures?
VAT liabilities and compliance may drastically vary depending on your business model. You may need to view the VAT implications on the following:
-Exports in GCC
-Exports Outside GCC
-Imports from withing GCC
-Imports from outside GCC
- VAT Record-Keeping?
You need to maintain all VAT related documents for 5 years. This requirements need to be taken seriously as indirectly it means that your VAT Audit can be conducted for any of the past 5 years. Also if asked you need to supply original documents to Federal Tax Authority (FTA).
- Staff Training?
To handle VAT complexities, it is vital that your staff must get hands-on training on VAT. While as an Entrepreneur or C-level executive, you may have a fair understanding of VAT but it is the ground staff who would face VAT issues on daily basis. Hence personnel from your Sales, Procurement, Accounts, Legal and HR should undergo VAT training to get a fair idea about business implication of VAT.
It is high time that as a business you should take VAT implementation seriously to avoid VAT fines and penalties.
We at Lynchpin Consulting can be your helping-hand to get your VAT Read. You can reach us at +971-4-4370704 or click here to contact us.