UAE VAT IN A SNAPSHOTapmh.in/apd/images/events/research/pdfs/1513776681-UAE VAT... · Real Estate Business 35:65 School ... • Grip on VAT or Indirect Tax laws VAT Preparedness Analysis

APMH & Associates LLPChar te red Accountants

UAE VAT IN ASNAPSHOT


• Legal Framework

• Understanding VAT Model

• VAT Impact in UAE

• A Quick Guide to VAT Registration

• Ongoing Contratce with Registered Persons

• Tax Group Registration

• Rates and Input Credit Mechanism

• Concept of Taxable Supply

• Intra GCC Transactions

• VAT Periodical Compliance

• Transition

• VAT Impact Areas

• VAT Implementation Roadmap

• GST Implementation Success Story (In India)

• VAT Advisory

Legal Framework forVAT in UAE

• Sets broad principles and some mandatory elements fo

r VAT in GCC

• Each state responsible for its

own implementation and enforcement

• Federal Decree - L

aw No (8) of 2017 passed which gives effect to GCC agreement

• Sets out im

plementation and compliance enforcement framework for VAT

• Cabinet Decision No. (5

2) of 2017 on the Executive Regulations of the Federal

Decree-Law No (8) of 2017 on VAT

GCCAGREEMENT

(Finalized andpublished)

VAT LAW

(Final law published)VAT IMPLEMENTATION

REGULATIONS

(Final regulation published on 27-11-17)Tax Procedures Law &

their regulation



Value Added Tax (VAT) Model

Manufacturer(AED 10000 + VAT 500)

Distributor(AED 11000 + VAT 550)

Retailer(AED 12100 + VAT 605)

Consumer(Landed Cost AED 12705)AED 500

AED 50 (550-500)AED 55

(605 – 550)

AED

(12100+605)

VAT Impact in UAE Sales Price VAT @ 5% VAT Credit Tax to the Government

Manufacturer to Net Taxable Price 10000.00 500.00 500.00Distributor

Distributor to Net Taxable Price 110% 11000.00 550.00 500.00 50.00Retailer

Retailer to Net Taxable Price 110% 12100.00 605.00 550.00 55.00Consumer Dealer

Total 1655.00 1050.00 605.00


Registration

Mandatory

Ar ticle 13

Person has residence inState/ Implementing State

a) If person proves at the end of given month total value supplies or expenses subject to tax over period of 12 months has exceed voluntary threshold (AED 187500)

b) Anticipated that above threshold will exceed in next 30 days

If person makesA) Supplies of goods or

services andB) No other person is

obligated to pay the due tax on these supplies without any threshold limit

Voluntary

Ar ticle 17

Registration by

Exception Ar ticle 15

Person does nothave a place of residence


a) Total Value of all supplies exceed the mandatory threshold (AED 375000)

b) Anticipated that above threshold will exceed in next 30 Days


Tax Group Registration (Article 14 of UAE VAT LAW)

51 : 49Hospitality

65:35Real Estate Business

35:65School

Holding Company

• Each shall have a place of establishment or fixed establishment in the UAE.

• The relevant person shall be related par ties.

• One or more person conducting business in a par tnership shall control the other.

Eligible forGroup Registration

Not Eligiblefor Group

Registration

APMH & Associates LLPChar te red Accountants Rates and Input Credit Mechanism

5%Input Tax

Deductible• Standard Rate

0%Input

Tax Deductible

• Expor ts of goods from UAE (Ar ticle 31 of Regulation)• Zero-rating international transport services for passengers & goods (Ar ticle 33 of Regulation)• Medicines and medical equipment (Ar ticle 35 of Regulation)• Supply & import of goods & service• Education (Ar ticle 40 of Regulation)

ExemptNon Deductible

• Finance services including life insurance (Ar ticle 42 of Regulation)• Lease or license of residential real estate (Ar ticle 43 of Regulation)• Supply of bare land (Ar ticle 44 of Regulation)• Supply of land passenger transport (Ar ticle 45 of Regulation)

• Supply of goods or services, other than those to be specified in the VAT Executive Regulations• Supply of goods made outside the UAE region• Supplies made by a person who does not belong to and is located outside the UAE region and falls outside the scope of imported services• Business below the threshold limit• Supply within or between designated zones under Article 51 fo Regulation• Government supply except as envisaged under law.

Out of Scope (Entities + Type of Transactions

+ Supplies)


Concept of Taxable Supply

• Goods• Services

• Business in UAE• Money considerations

• Include Deemed Suppy

• Exclude Exempt Supply

• Goods• Services

Special Factors

• Business in UAE• Money considerations

• Include Deemed Suppy

• Exclude Exempt Supply

Object of supply

Reasons of supply


Supply is a Wide Term

Of Goods(article 5)

Deemed Supply(article 11)

Of Services(article 6)

Special Cases(article 7)

Of More thanone components

(article 8)

Via Agent(article 9)

To Govt. Entities(article 10)

SupplyIncludes


Registered Dealer

UAE VAT payable by Importer

Intra-GCC Transaction

Including Non Implementingstates of GCC region

Local SaleUAE VAT

Local Purchase

Suppliers Suppliers

Import PurchaseUAE VAT payable by Importer

Zero RatedExport Sale

You

UAE VAT payable by ImporterIntra GCC purchase

Suppliers

Intra GCC sale

UAE VATIntra GCC sale

Bran

ch T

rans

fer

No T

ax

UAE VAT

KSAUnregistered

UAE Implementing StatesGCC Region

World


VAT Periodical ComplianceLength of Tax period : Standard Tax period is 3 months ending on the date that the authority.

Due Date for filing of tax return - 28th day following the tax period.

(As per 62 & 63 of VAT UAE Regulation)


Transition

An invoice has been prior to 01-01-2018 or Consideration receives before 01-01-2018.

Date of supply shall be 01-01-2018 if, Following instance occur after 01-01-2018.

Transfer of Goods under the supervision of the supplier.

Placing the Goods at the recipient’s disposal.

The completion of assembly or installation of the Goods.

The issuance of the customs declaration.

The acceptance by the Recipient of Goods of the supply.


VAT ImpactAreas

• Assess costing• Re-design processes

• Collect customer vat data• Restructure at existing contracts

• complete registration formalities• Plan for transition to new law• Plan for the change in cashflow• Design compliance calendars• Add relevant tax clauses in relevant agreements• Validate critical documentation and formats

• Update vat data in vendor/ customer Masters• Update inventory masters with Tax class and rates• Develop document formats for Invoices / debit note / credit notes• Design relevant statutory• Reports for vat filing and record Keeping

• Re-skill / recruit / outsource• Assess and change the division of Responsibility with respect to vat

SupplyChain

Sales &Marketing

HumanCapital

ITSystems

Tax &Finance


Post Implementation Support• Day to day queries• Handholding team through

3 monthly cycles of VAT filing from an offshore basis

Impact Analysis• “As is” Study• Suggesting Tax Optimization

Scenarios• Drawing Change Management

Roadmap

PHASE-1

Implementation• Registrations• Policy and SOPs• Team Training• System Integration support

PHASE-2

• Impact in costing / pricing / cashflow due to VAT

• Objective decision making for optimizing the tax impact

• Approved implementation roadmap

• Clear operating guideline• Team sensitization• ERP requirement mapping• ERP User Acceptance Testing (UAT)

• Compliance Assurance• Online issue resolution• System related feedback generation

PHASE-3

Roadmap for VAT ImplementationAc

tivity

Key

Outc

ome

ImpactAnalysis

Dec. 2017 Dec. 2017 1st Jan. 2018 Feb., Mar., April 2018

ImplementationPost

Implementationsupport

UAE VAT PreparednessAPMH & Associates LLPChar te red Accountants

• Have worked with various Industry tier

• Good presentation skills • Analytical Skills

• Grip on VAT or Indirect Tax laws

VAT Preparedness Analysis

Team

Understanding• Understanding of Business• Understanding of Systems

Training• On Boarding Workshop• Workshop on Implementation• Handling Q & A

Reporting• Issues & Suggestions• Preparedness in Domain• Preparedness in People• Preparedness in Systems


• Experts with through Domain knowledge of VAT

• Detailed templates & process flows, • Helpdesk support

• Compliance Experience & Software Tieups

VAT Enterprise Compliance

Generation of relevant VAT reports from ERP

Upload returns and track pending status

Sense check the VAT aspects in transactions

Compute the VAT liability and generate payments advice

Develop of reports for the management and accounting entries

Close accounts in ERP

GST Implementation Success Story (In India)

Multi-Nationals Trading and Distribution Manufacturing and Ancillaries

Construction and Real-estateLogisticsBanking

Engineering Hospitality Broking e-commerceSAAS

Startups Small and Medium Large

VC / PE Funded

Family Owned



CA Pranav KapadiaPartner APMH

Profile BriefPranav’s expertise lies in GST Consulting,GST Advance Ruling, GST Transaction Advisory and GST Classification Consulting. He has been an expert consultant to large corporates with presence in Multiple States with complex structures in the Indirect Tax. Pranav lucidly deals in complex legal matters like Works Contracts (WCT), DDQ (Determination Disputed Question) now called Advance Ruling (AR), Assessments and Appeals related to VAT and Allied Tax Laws. Pranav is also an expert consultant on VAT for Corporates and Multinationals in GCC region, mainly Saudi Arabia and UAE. He is the President of The Goods & Service Tax Practitioners Association (GSTPAM) of Maharashtra. Pranav is also part of the Indirect Tax Research Committee of the WIRC of ICAI. He has been past Chairman of Indirect Tax Committee of The Chamber of Tax Consultants for 2014-15 and past Convenor of Ghatkopar CPE Study Circle of ICAI. Pranav has addressed various seminars and lectures on MVAT and CST & GST at the GSTPAM, Chamber of Tax Consultants, WIRC Study Circles of ICAI and various Industrial Associations in Mumbai and across Maharashtra. Specializations• VAT Advisory• VAT Opinion• VAT Advance RulingEducation• Chartered Accountant• DISA - ICAI

CA Mitesh Katira Partner APMH

Profile BriefMitesh is a Chartered Accountant and a ISA qualified with specialisation lies in Business Advisory Services with more than 15 years of experience. Mitesh has been focusing on Internal Audits, Compliance Outsourcing and GST implementation. He has been helping corporate and Multinationals on GST Impact Analysis, Implementation and Compliance. Mitesh has been convenor for Information Technology Committee of the CTC i.e., Chamber of Tax Consultants. He is also a part of IT committee of the WIRC of ICAI. He has been assisting a diverse range of businesses with the implementation of VAT in the GCC mainly handling VAT implementation projects in Damman and Kingdom of Saudi Arabia (KSA). He has also visited UAE, Khobar, Dammam, Jeddah and Riyadh for understanding the VAT implementation issues of various industries, multinationals, hospitals, hotels, real-estate companies in this region.Specializations• VAT Implementation • VAT Transaction advisory• VAT compliance outsourcing • Corporate Training• Process ImplementationEducation and Certifications• Chartered Accountant • DISA - ICAI• FAFP – ICAI • Certified trainer india GST by ICAI


CA Atul MehtaSenior Partner

Profile BriefAtul focuses on accounting and taxation practice of the firm. He has exposure of more than 17 years in accounts outsourcing and tax advisory side with a specialization in GST Compliance His expertise lies in consultancy, opinions and Tax Planning for Corporates and Individuals. Atul can lucidly handle complex audits, advisory and assessment matters issues related Works Contract matters, CENVAT Credit Rules, Point of Taxation (POT) Rules, Point of Provision of Services (POPS) Rule and so on. Currently Atul is a Convenor for Indirect Taxation Committee of the Chamber of Tax Consultants. He has led the Ghatkopar CA CPE Study Circle of WIRC. Atul has Conducted Training Session organized by WIRC-ICAI and has served at WIRC ICAI Committee for Research and Development and Direct Tax Committee. Atul is appointed as the Vice Chairman of CTC IDT Committe of India.

Specializations• VAT ComplianceEducation• Chartered Accountant• DISA - ICAI

CA Amlesh GuptaManagerAPMH

Profile BriefCA Amlesh Gupta is a Chartered Accountant by profession with more than 5 yrs of experience in Tax Advisory services mainly consisting of GST Implementation and Enterprise Compliance India VAT, Service Tax, Withholding tax and GST Compliance .Amlesh has been handholding India GST Impact Analysis and GST Implementation for various service industries while India went live with GST on 1st July 2017. Apart from domain knowledge, Amlesh has brief understanding of IT Systems, Project Management and Training Skills. Amlesh has been understanding, learning and tracking development in VAT Laws and Regulations in Saudi Arabia and other GCC Countries. Amlesh has extensive knowledge and experience in handling VAT implementation in Dammam, Kingdom of Saudi Arabia (KSA) and is currently handling a huge project in Dammam.

Specializations• Tax Advisory• VAT Compliances & Consulting• GST Implementation, Compliance and Consulting• Tax Technology

Education• B.Com• Chartered Accountant


CA Pratik MehtaVAT Consultant

Profile BriefPratik is a qualified Chartered Accountant from the ICAI. He is been in the field of Indirect Taxation for more than 5 years. He has worked with various corporates and multinationals with regards to VAT, Service Tax and now GST. Pratik has been doing consulting, training and implementation of Indirect Tax Laws in varied industries like financial services, trading, manufacturing, education and so on. Pratik has been learning and implementation UAE VAT for a large education group based in Dubai.

Specializations• Tax Advisory• VAT Compliances & Consulting• Tax Technology

Education• B.Com• Chartered Accountant

Mehul PawaniSenior IT ConsultantAPMH

Profile BriefMehul is an IT enthusiast with deep understanding about functional aspects of software applications computer systems, networking along with background of accounting and finance. Mehul has been attending various workshops and trainings on data analytics, excel, ethical hacking, cyber forensic, excel and so on. With his ability to understand IT and money trails ie, accounting quickly. Mehul is an expert in systems audit, vulnerability testing, application implementation, etc. Mehul has been important part of IT team of APMH for more than 3 years.Mehul has been helping a hospital in Dammam, Saudi Arabia as well as an Education Group in the UAE to adopt their ERP both billing system the GL system to the requirements of the VAT.

Specializations• VAT IT Implementation• Process Consultant


Disclaimer: Content published in this book is based on the VAT Acts, Rules and notifications from other sources believed to be reliable, but no representation or warranty is made to its accuracy, completeness or correctness. This is to simplify the legal provisions and procedural aspects of of the law keeping in mind a basic businessman and their accounting team, with the helps of simpler language and graphical representation and so may result into error or omission or interpretation differences. This document is not intended to be a substitute for professional, technical or legal advice or opinion and the contents in this document are subject to change without notice. Whilst due care has been taken in the preparation of this presentation and information contained herein, APMH, accept any liability whatsoever, for any direct or consequential loss howsoever arising from any use of this document or its contents or otherwise arising in connection herewith.

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+91-9833777556 [email protected] www.apmh.in

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UAE VAT IN A SNAPSHOTapmh.in/apd/images/events/research/pdfs/1513776681-UAE VAT... · Real Estate Business 35:65 School ... • Grip on VAT or Indirect Tax laws VAT Preparedness Analysis