Volume # 03 | March, 2017

UAE Freezones Biz News Updates

Guide for UAE companies: Four-steps to being VAT ready

Here is a simple four-step guide to help companies in the UAE to prepare for VAT implementation, which can take between eight and 12 months. It may take longer if some of the activities are outsourced, for example IT.

1. Project preparation
Businesses need to prepare a project plan and secure the necessary internal and external resources and ensure the stakeholders in the business are informed, as VAT is not just a finance project. It affects all transactions and so touches every aspect of the organisation. VAT affects IT systems, finance, human resources, legal teams and even inter-organisation transactions. IT systems are integral to the process because they need to be updated to handle the VAT. Preparation will entail a cost that companies will need to be aware of.

2. Impact assessment
Businesses need to complete an impact assessment to understand VAT and its commercial effects, prioritise issues and prepare for implementation. This is a key step as it sets the foundation for implementation. The assessment looks at its various effects on the organisational, operational and financial levels. Typically, an impact assessment needs between eight and 12 weeks to complete and that leaves a relatively short time, no more than nine months, to affect implementation.

3. Design and implementation
Businesses need to design the systems and train their staff on the process requirements for VAT. They must implement necessary changes to systems, controls, reporting and governance. Based on the impact assessment, they need to develop a road map for identifying the changes required, understanding the scheduling requirements and planning for work. Implementing the changes across various levels in the organisation usually starts with mapping the transaction footprint to understand the VAT obligations of the business. This should form the basis for making changes across different verticals in the organisation such as IT, supply chain and human resources.

4. Registering and testing
Businesses need to register for VAT and test their business systems to ensure they are capable of compliance and reporting. Businesses need to integrate the changes made into the operations and train relevant staff about their new roles and responsibilities to achieve the desired result. Testing the VAT system, processes and controls during a "live" phase (expected from January 1, 2018) is important to allow for the complete and accurate completion of the first VAT return.

February 12, 2017

Free Zones Of UAE

Volume # 03 | March, 2017

UAE Freezones Biz News Updates

Courtesy The National

Emirates Of UAE

Business

UAE Offshore