VALUE ADDED TAX (VAT)

VALUE ADDED TAX (VAT) in gcc states

In June 2016, Finance Minister in GCC States unanimously agreed to implement VAT in the GCC States, effective January 2018 at 5% rate.
On April 21, 2017, the GCC Unified Framework for VAT was announced. The Framework represents a solid platform for the GCC States to come up with their internal VAT Legislation. Saudi Arabia & UAE already did and implemented VAT. Remaining GCC States are expected to announce their internal legislations soon.

What is Value Added Tax (VAT)?
VAT is an indirect tax that applies to the supplies of goods and service with exception of specified goods and services, e.g. exports, residential real estate, certain financial charges, education and medical supplies (based on each country regulations). VAT is affecting almost all businesses that conduct economic activities to gain profit.

HOw DOES VAT WORK?

Value Added Tax affects all phases in the production and supply chain for goods and services. Businesses are tax collectors without consideration. VAT paid to the Government is equal to the VAT collected from customers on sales less VAT paid to suppliers on purchases.

REgistration & accounting for vat

> Governments prepare VAT infrastructure & have businesses registered electronically.
> Businesses account for & pay VAT monthly or quarterly usually (electronically).
>Tax authorities perform basic data checks & carry out audits to detect errors & fraud.
> Errors and fraud can result in significant penalties.

VAT applies to goods and services

> Supplies of goods: means sale of tangible property where title has been transferred.
> Supplies of services: means supply of everything that does not quality as "good".

what are output VAT and input vat?

> Output VAT is the tax due and chargeable in respect of any supply of taxable goods or services made by a taxable person
> Input VAT is the tax payable by a taxable person with relation to goods or services supplied to or import by such taxable person for the purpose of making taxable supplies.

HOW accbest will assist businesses
in vat implementation?

AccBest Consultancy provides professional consultancy services to businesses in Bahrain and other GCC States on this new system of Value Added Tax. AccBest will ensure that businesses are VAT-risk-free by providing the needed consultancy service on all matters related to VAT based on the industry in which the businesses performs. At a minimum, we provide the following:

> Gap Study Analysis to assess VAT applicability to businesses.
> Consultancy on It requirements to comply with VAT.
> Review and advice on contract amendments and new contract language for VAT.
> Staff training to ensure proper implementation and compliance.
> Businesses support in providing consultancy services for VAT implementation.
> Support in submission of "accurate" VAT Returns.

BAHRAIN

Latest update in Feb 2018, Bahrain shall be ready for VAT implementation by end of 2018

SAUDI ARABIA

Saudi Arabia implemented VAT on
January 1, 2018

UAE

United Arab Emirates implemented VAT
on January 1, 2018

OMAN

Latest update in May 2018, Oman will implement VAT in the last quarter of year 2019

KUWAIT

Kuwait delayed the implementation
of VAT to year 2021

QATAR

No recent updates as to when Qatar will implement VAT