A Few Key VAT Facts To Know In The GCC
Value Added Tax or VAT as its better known, was introduced to the GCC for the first time ever, in January 2018. The move set in motion a series of changes for businesses in the region, and marks a milestone moment for the oil-rich area as well. VAT will effectively provide an alternate means of income, allowing the already developed and in fact, quite established UAE to look at consistent growth and on-going development accordingly. Businesses are well-advised to seek the counsel of a tax consultant in Dubai, so as to understand it as a whole. On that note, our extensive experience and knowledgeable tax consultants are at your disposal whenever you require.
In the meanwhile, it helps to be well-versed with VAT as much as possible, especially with regards to what this means for the GCC. Here are some key facts we’ve put together for your use.
VAT IMPLEMENTATION COULD TAKE UPTO 1 YEAR
Though VAT was introduced in January 2018, it could take upto January 2019 before all companies in the GCC have implemented VAT. For instance, Bahrain plans to apply for VAT mid-2018. Those engaging in trade with GCC countries during this time period should also be made aware of the changes, and foreigners are also advised to read up thoroughly about the implications of VAT on them as they may not be as aware as the locals are.
FOLLOWS A GCC TREATY
Seeing as how there are several different countries under the GCC umbrella, a broader GCC treaty lays out the framework that’ll come into play. Based on this framework, each country will then take the right steps and measurements towards implementing laws that will help meet the goals of that treaty individually and collectively. As a VAT registration company in Dubai, this is one of our responsibilities as well, and part of that includes helping businesses pull their taxes together.
CHARGES AND PURCHASES
The percentage of VAT to be charged on the sale of taxable products is 5%, so if one needs a rough idea of how much costs will increase by say, as a visiting tourist, this is useful. Businesses can also look forward to being able to claim VAT on purchases, provided of course that all necessary documents and financial records are in order.