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Your Tax Partner

Updated: Aug 23, 2019

As a business owner or manager, you have many responsibilities to ensure that your business is profitable and successful. VAT is one of your responsibilities but you don’t have to do it alone.

That’s where a Certified Public Accountant (CPA), who is the best Tax Agent, can be an essential partner: Becker for Financial Solutions can help you discussing your tax and VAT outlook so that we can develop a customized plan which will address your business’s specific financial concerns and requirements.

The much-anticipated regime Value-Added-Tax (VAT) bring into existence by the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan to implement VAT in UAE from 1st of Jan 2018. For the implementation of Value-Added Tax in UAE, the Federal Decree-Law No 8 of 2017 comes up with the lowest taxation rates in the world. The tax rate decided by the UAE government is 5 percent on the import and supply of goods and services, it will be applicable at each stage of production and distribution and it also includes what is deemed to be a supply.

Businesses or individuals are required to register under the VAT if exceeding the mandatory VAT registration threshold (375,000AED). It is essential for the business or individuals to submit or file VAT returns time to time to the tax authorities. It is also essential for the businesses to maintain records of all business transactions which will include:

  • Import or Export

  • Tax Invoices & Debit or credit notes

  • VAT Exempted or zero-rated supplies and purchase of goods

  • Records of goods/ service used personally and provided for free

The risks of your organization getting VAT implementation wrong are extremely high. Not only will you face harsh penalties and interest charges payable, but there is a huge risk of operational challenges in terms of being unable to import or sell goods or services, which can bring your business to a standstill.

VAT affects all parts of Business: Finance, IT, People, Prices, Profit, Sales, Cash Flow, Contracts and Customers. You need to prepare your organization to:

  • Understand the commercial impact of VAT on your organization and how VAT will impact commercial contacts, pricing, margins, systems and resources

  • Recognize potential VAT impacts on specific business transactions such as royalty payments, rebates and sponsorship

  • Learn how taxable, zero-rated and exempt will impact your cost structure and pricing strategy

  • Discover how your business should manage VAT for intra-GCC transactions as well as international trade.

Becker is currently assisting many UAE clients in preparing for the introduction of VAT. We have set out our road map for introducing and implementation of VAT which consists of three phases:

Phase 1: VAT impact assessment on business and implementation of road map

  1. Review and mapping of the ‘as is’ position

  2. Identify VAT touch points and risks.

  3. Design a road map.

  4. Assess system capabilities.

Phase 2: Plan and build; blueprinting design; implementation roll out, testing and staff training.

  1. Plan and design process, accounting & IT requirements

  2. Identify additional software needs.

  3. Implement system and process change

  4. Testing and dry-run

  5. Run training program

  6. Communicate with clients and suppliers

Phase 3: VAT compliance, system and reporting support.

  1. Assist with submitting first VAT returns.

  2. Review first returns and system outputs.

  3. On-going VAT compliance

  4. Systems support

For further assistance please contact us to arrange for appointment to meet with our professionals.

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