- September 10, 2017
- Posted by: VatMan
- Category: Blog
With 1 January 2018 fast approaching and the authorities in the UAE and KSA moving full steam ahead with their plans for VAT implementation, what can we learn from the experience of others? By reviewing how businesses responded to the implementation of VAT in other countries, valuable insights are apparent from the lessons learnt.
There are more than 150 countries that operate a system of VAT or GST in some form; some have been in existence for decades and have become models for newcomers while a large number have been more recent. The latest and most relevant ones for us are Singapore (1 April 1994), Australia (1 July 2000) and Malaysia (1 April 2015).
The core lesson to be learned from the three recent cases that forms the foundation of all the hurdles encountered by businesses in those countries:
This Inadequate Preparation has its root cause in management attitude. Management and ownership of businesses felt that this was something that they could “take in their stride” or even believed that “it’s not likely to happen on time” and therefore did not start early preparation. Timely and adequate preparation helps to prevent the following types of issues that were observed in these countries:
- I didn’t understand how VAT works!
Awareness seminars and more in depth training can prevent this issue. Contact a VAT specialist and arrange training at the earliest, as the deadline draws near most of the good service providers will already be booked. There are many options available for general public seminars, some at considerable cost; however, a more personalised option to hold the seminar at your own location is also available with VatMan Gulf.
- I didn’t register for VAT on time!
Registration guidelines are available ahead of time. Make sure your business understands these and gathers the required documents and information for a timely and smooth registration process. In the KSA registration has already begun and UAE is going to open up their online registration portal any day now.
- VAT Legislation was hard to follow!
Again, awareness and training would help. However, it would be better with early preparation to make an informed and calculated decision to handle VAT with in-house resources or to contact a third party VAT specialist. The best option is to use a specialist so you can concentrate on running your business and not worry about VAT issues and compliance.
- We didn’t understand VAT categorisation of income and expenditure items!
This stems from lack of awareness and knowledge. Proper training should overcome this issue.
- It was more than just debits and credits!
While a good understanding of accounting entries helps in VAT record keeping, the VAT compliance and planning process requires a much deeper understanding.
- I didn’t know there was a penalty for that!
This can and will happen. We guide you as to why it happened so that the issue won’t repeat itself and we deal with the FTA on your behalf to resolve the issue as quickly as possible.
- Our IT system couldn’t handle the new VAT requirements!
The IT personnel need to be guided by VAT specialists as to the necessary changes for VAT incorporation. In many cases the existing IT system will not be able to handle VAT and therefore an entirely new system may be required, early identification of this requirement is essential.
So don’t fall victim to these issues and start early preparation and training; contact VatMan Gulf, or a specialist of your choice, today to arrange a review of your business circumstances and requirements. https://vatmangulf.com/contact/
“By failing to prepare, you are preparing to fail.”
– Benjamin Franklin
Written by: Azeem Zafar, founder and CEO of VatMan Gulf Limited.
VatMan Gulf is the first choice for businesses requiring VAT specialist services in UAE and the rest of the GCC. We provide the best client experience and deliver value for money. VMG’s mission is to provide a VAT focused service; thus differentiating itself from the majority of firms in the region that take a very general accounting approach. At VatMan Gulf we stay well versed on VAT law developments, providing a comprehensive service that includes, but is not limited to, imparting VAT knowledge, implementing training procedures and ensuring VAT compliance on a continual basis.