VAT Implementation in UAE

APMH & Associates LLP
Chartered Accountants
UAE VAT IN A
SNAPSHOT

• 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 for
VAT in UAE
•
Sets broad principles and some mandatory elements
for VAT in GCC
•
Each state responsible for its own implementation
and enforcement
•
Federal Decree - Law No (8) of 2017 passed which gives effect to GCC agreement
•
Sets out implementation and compliance enforcement framework for VAT
•
Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal
Decree-Law No (8) of 2017 on VAT
GCC
AGREEMENT
(Finalized and
published)
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 10000.00 500.00 500.00
Distributor
Distributor to Net Taxable Price 110% 11000.00 550.00 500.00 50.00
Retailer
Retailer to Net Taxable Price 110% 12100.00 605.00 550.00 55.00
Consumer Dealer
Total 1655.00 1050.00 605.00

Registration
Mandatory
Article 13
Person has residence in
State/ 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 makes
A) Supplies of goods or
services and
B) No other person is
obligated to pay the due tax
on these supplies without
any threshold limit
Voluntary
Article 17
Registration by
Exception Article 15
Person does not
have 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 : 49
Hospitality
65:35
Real Estate Business
35:65
School
Holding Company
• Each shall have a place of establishment or fixed establishment in the UAE.
• The relevant person shall be related parties.
• One or more person conducting business in a partnership shall control the other.
Eligible for
Group Registration
Not Eligible
for Group
Registration

Chartered Accountants Rates and Input Credit Mechanism
5%
Input Tax
Deductible
• Standard Rate
0%
Input
Tax Deductible
• Exports of goods from UAE (Article 31 of Regulation)
• Zero-rating international transport services for passengers & goods (Article 33 of Regulation)
• Medicines and medical equipment (Article 35 of Regulation)
• Supply & import of goods & service
• Education (Article 40 of Regulation)
Exempt
Non Deductible
• Finance services including life insurance (Article 42 of Regulation)
• Lease or license of residential real estate (Article 43 of Regulation)
• Supply of bare land (Article 44 of Regulation)
• Supply of land passenger transport (Article 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 than
one components
(article 8)
Via Agent
(article 9)
To Govt. Entities
(article 10)
Supply
Includes

Registered Dealer
UAE VAT payable by Importer
Intra-GCC Transaction
Including Non Implementing
states of GCC region
Local Sale
UAE VAT
Local Purchase
Suppliers Suppliers
Import Purchase
Zero Rated
Export Sale
You
Intra GCC purchase
Suppliers
Intra GCC sale
UAEVATIntraGCCsale
BranchTransfer
NoTax
UAE VAT
KSA
Unregistered
UAE Implementing States
GCC Region
World

VAT Periodical Compliance
Length 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 Impact
Areas
• 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
Supply
Chain
Sales &
Marketing
Human
Capital
IT
Systems
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 Implementation
ActivityKeyOutcome
Impact
Analysis
Dec. 2017 Dec. 2017 1st
Jan. 2018 Feb., Mar., April 2018
Implementation
Post
Implementation
support

UAE VAT Preparedness
• Have worked with
various Industry tier
• Good presentation skills
• Analytical Skills
• Grip on VAT or Indirect Tax laws
Pricing :
$ 1000 per day per expert
*Stay, food, travel, visa over and above $500 per day of stay
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
Pricing :
* $ 3000 per month for one VAT Registration / $ 5000 for 2 registrations
* 1 onsite visit to the client place
* Unlimited oﬀsite support by emails and calls
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 Kapadia
Partner APMH
Profile Brief
Pranav’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 Ruling
Education
• Chartered Accountant
• DISA - ICAI
CA Mitesh Katira
Partner APMH
Profile Brief
Mitesh 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 Implementation
Education and Certifications
• Chartered Accountant • DISA - ICAI
• FAFP – ICAI • Certified trainer india GST by ICAI

CA Atul Mehta
Senior Partner
Profile Brief
Atul 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 Compliance
Education
• DISA - ICAI
CA Amlesh Gupta
Manager
APMH
Profile Brief
CA 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

CA Pratik Mehta
VAT Consultant
Profile Brief
Pratik 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
Mehul Pawani
Senior IT Consultant
APMH
Profile Brief
Mehul 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.
Mumbai :
D-613/614, Neelkanth Business Park, Opp. Near Railway Station, Vidyavihar(W), Mumbai - 400 086.
+91-22-2514-6854 / 55 / 56 / 57 / 58
+91-9833777556
info@apmh.in
www.apmh.in
Saudi Arabia / UAE Contact No.:
+96-6547300622
mitesh@apmh.in
Get In Touch

VAT Implementation in UAE

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