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Value Added Tax (VAT), an indirect tax levied on supply of goods and services, was introduced in the UAE in January 2018 with an aim to achieve a stable economy, boost government revenue and help businesses achieve overall efficiency. The rate of VAT is 5 per cent. Companies in UAE are required to register for VAT if the value of their taxable supplies exceeds AED 375,000 over the previous 12-month period or is estimated to exceed that threshold in the next 30 days. Voluntary registration is possible if supplies and imports (or expenses in case of a start-up business) exceed AED 187,500.
With one year of the successful VAT implementation in UAE, the system brought some challenges for UAE companies pertaining to augmented costs besides the implementation costs as well as impact on cash flows. Yet, it promised to ensure long-term benefits by replacing the inefficient accounting systems and enhancing business efficiency. Many VAT consultants in UAE work towards supporting companies across the country to achieve compliance and efficiency. Competent VAT consultants possess the expertise and knowledge in guiding organisations in dealing with these challenges.
By choosing the right VAT consultants, companies can look forward to a host of advantages and ultimately achieve their business objectives and growth. Since the tax system has been introduced for the first time in the GCC (Gulf Cooperation Council), the support of qualified VAT consultants becomes crucial for any organisation. There are certain points to consider, as mentioned below, that would help companies hire the best consultant that is best suited for their business.
Knowledge of tax laws
The laws may be complicated when it comes to areas concerning the handling and managing the VAT affairs in any industry. A suitable consultant having sound knowledge of VAT laws will be well equipped to deliver the right advice and assistance for any enterprise. This would prove to be highly beneficial for businesses and help them avoid unwanted mistakes, errors, omissions that could lead to fines. Furthermore, VAT consultants who are familiar with international tax computation and regulations are the best choice for companies having overseas operations.
Experience in taxation is another important requirement for companies. VAT consultants who have been in the industry for a considerable time and those who have strong finance background will have the flair for efficiently executing functions like planning and reporting for the client company – which is instrumental in achieving compliance.
Impact analysis and due diligence
Companies should ensure selection of qualified consultants who will be responsible for conducting impact analysis and due diligence – which forms a part of a consultant’s core expertise. Skilled VAT consultants would extend support by analysing the impact VAT will have on all aspects of the business including a company’s expenses, cash flows and operations. The impact assessment would cover assessment of company processes, human capital, new cost estimation, change in accounting system and compliance.
Scope of services
Companies perform the crucial task of meticulously documenting their business income, costs and associated VAT charges. VAT-registered businesses can charge VAT on taxable goods or services they supply, filing VAT returns, reclaiming any VAT they paid on business-related goods or services as well as maintain business records. This is where the need of VAT consultants arises. For businesses seeking for registration of their company will require consultants having wide-ranging service offerings instead of those with limited services on offer, say only for computation. It would be in best interest of companies to hire consultants offering various services such as registration, computation, refund consultancy, etc.
Alankit Management Consultancy offers reliable VAT related consulting services for start-ups and established companies of all sizes across UAE. Having prominent experience of over 13 years in UAE, it has emerged as one of the leading VAT consultants in Dubai. The company has experienced professionals who have attained prowess in delivering customised solutions for all business needs as well as relevant tax advisory services in UAE.