If a UAE-based supplier is exporting goods to any registered company in Saudi Arabia, then the local exporter here in the UAE will not have to charge VAT on the goods but the Saudi company will account using the Reverse Charge Mechanism.

Companies operating in the UAE will need to prove their VAT compliance to tax officials, according to Girish Chand, director, MCA Chartered Accountants, who spoke at the VAT Talks conference in Dubai.

The sessions were held to discuss the impact of VAT on business operations, especially their supply chain, working capital, commercial operations and IT systems.

“When a tax official visits your company, he can ask for your records and it’s the responsibility of the retailer, wholesaler or any other company to prove that their company’s turnover is less than the mandatory threshold limit,” he explained.

“In addition, companies also need to show their records if the company is charging the VAT from the client. Hence, maintaining records would become obligatory for all the entities operating in the UAE,” Chand added.

Those companies which are not registered for VAT cannot charge the tax from the customers.

It’s the responsibility of the companies to prove that they are VAT-compliant in according with the UAE laws as the tax officials from the Federal Tax authority may visit the company to check records to ensure compliance with the new tax regulations, according to Chand.

The UAE has announced that it will implement VAT from January 1, 2018, at five per cent. In addition to the UAE, Saudi Arabia has also announced implementation of VAT as part of an agreement between GCC states.

Girish pointed out that if a UAE-based supplier is exporting goods to any registered company in Saudi Arabia, then the local exporter here in the UAE will not have to charge VAT on the goods but the Saudi company will account using the Reverse Charge Mechanism.

Similarly, it’s vice-versa for Saudi and Emirati companies.

VAT Talks Chapter was hosted by Incospro and Katerpillar with AAC’s to create a networking session for businesses and entrepreneurs.

This session was addressed by experts from Tally, MCA, Aurifer to explain regulations about value-added tax set to be implemented next year.

A VAT Masterclass is being held on September 26th at the Fairmont Dubai from 9am to 1pm and will cover VAT from every angle, from the basics right up to the more complex VAT rules.

Agenda in detail (from the organisers):

Introduction to VAT

How VAT Works?

Who Should register for VAT or who should’t and why?

Rules of VAT

Different categories of VAT rates

Compliance of VAT

The VAT Registration Process

Learn the A-Z of VAT registration, which forms to fill in and how to complete them correctly

The accounting basis explained in detail – Make sure you’re accounting for VAT at the correct basis, or you’ll put yourself at a disadvantage

Time of supply rules – Find out when you should be paying and claiming VAT and how to deal with pro-forma invoices

Standard-rated supplies – Discover what items VAT is charged on so you don’t pay over too much (or too little)

Deemed supplies – Learn about the relevant deemed supplies in your business and how they affect your output tax. Plus find out how and when to calculate that output tax

Cash Flow impact of VAT

Business departments impacted by VAT

Sector specific presentation

VAT Audit – Here you’ll get all the info you need on how to deal with an audit. It’s a practical session including completing the VAT return with the necessary documents

Documents and general Q+A – Bring your documents and ask questions on all those other little things VAT issues that bother you!

Source Link | Arabian Supply Chain