Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 9-10-2017 – Yet another tax reform in the world in Gulf Countries is taking place. VAT is being introduced for the first time in Gulf countries as recommended by Gulf Cooperation Council (GCC). Genesis The GCC group of nations have historically worked together in designing and implementing new public policies as they recognize that such a collaborative approach is best for the region, therefore they framed a VAT agreement for all the member states. GCC VAT AGREEMENT is a framework agreement signed by all six GCC countries: Broad framework that mainly states provisions for intra GCC trade Gives countries discretion to choose treatment in certain sectors where it does not affe
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able person is a person, persons or entity that carries out an economic activity that requires them to be registered for VAT. VAT is levied at each stage in the supply chain and is collected by businesses on behalf of the Government. VAT is ultimately incurred and paid by the end consumer. From when? For UAE and KSA 1st January, 2018 is the go-live date for VAT and other GCC countries have time from January 1st , 2018 to January 1st, 2019 to implement VAT. Registration for VAT will commence prior to implementation date. In UAE, Registration has commenced w.e.f. 1.10.2017. What tax laws? There will be three Federal laws applicable in UAE and KSA: Executive Regulation of Federal Law on Tax Procedures Federal Decree Law on Value Added Tax Fede
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te prepared scenarios Understand the key areas of impact in business and plan for adversely affected areas. Cash flow impact analysis as VAT is paid on an accrual basis Analyse the capabilities of existing accounting systems to deal with VAT Contract reengineering and documentation Analyse and understand transitional issues. Evaluate the impact of new tax on pricing of any supplies. Plan for the training of existing staff and the recruitment of skilled resources/outsourced agencies Prepare the implementation road map and align relevant teams IT preparedness and software upgradation Inventory management Working capital reassessment and management Due diligence of existing system and procedure VAT in gulf countries is likely to be simple as c
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