As an indirect, transactional type of taxation, Value Added Tax (VAT) has a significant impact on the entire business operations. A company in UAE must ensure all relevant employees possess the appropriate skills and knowledge about VAT. Here are some facts about VAT that you need to know.
It is most certain to affect the recruitment within the region where there was not any specialist around to oversee compliance activities and advisory services for VAT. To understand the tax team size, the business is looking at the data of vat implemented countries.
Based on research, At least 2,000 tax specialists are employed in Europe. Among them, 44 percent are employed by tax companies whereas the remaining 56 percent works as professional advisors. The research has also found that most of the businesses across the globe have their own tax team. Hence, the businesses in UAE not only need a dedicated VAT advisory but more importantly compliance activities with VAT schemes. Also, it is important to have it continue on an on-going basis.
The number of inhouse tax specialists will depend on business size and the industry it belongs to. This also applies to the United Arab Emirates and the entire Gulf region. Also, there’s a trend towards focusing on indirect tax in the market. With our research alone, we’ve found the total number of specialists on taxation in the UAE has increased and the proportion of VAT population that’s working inhouse also increased dramatically.
Large organizations have tax operating models that focus more on risks and obligations associated with the indirect tax. Businesses in the UAE are now introducing specific vat operating models to manage VAT within the business. Most VAT operating models are in compliance with the country law. Compliance work for businesses is often performed:
We expect businesses operating in all other countries to follow the trend here in the UAE as well. This includes prioritizing compliance over strategic management of VAT in the short-term perspective.
Where there’s no senior tax specialist available, the senior head of an accounting department will take on more strategic roles.
VAT implementation in UAE needs a careful and structured way.A business has to take into account the requirement of keeping it appraised of changes and developments that are relevant to them as well as for businesses to engage with the process. It will most certainly require comprehensive implementation, design, planning, and post-implementation monitoring of VAT processes.
When you are planning of in-house VAT function, consider the following:
Typically, inhouse VAT functions need specialist resources that focus on company compliance and supporting the business with more technical advice.
Because of huge investments, many businesses may be unable to maintain a VAT team. The best way to tackle this situation is to outsource the VAT function.
The tax expert will help businesses in preparing tax returns to minimize costly errors. They also work closely with businesses throughout the fiscal year to minimize business liability.
When running a business in UAE, it can be difficult to manage every aspect of it, most especially taxation and compliance activities. Call us here in VAT Registration UAE so that our team can address your needs!