What is VAT?
Value Added Tax (VAT) is an indirect tax levied on consumption. It is imposed on the sale of goods and services excluding the goods and services which are exempt from VAT under the law. More than 150 countries around the world have already implemented the VAT including Canada, Australia, New Zealand, Singapore and many European countries. The average rate of VAT around the world is 17% and Hungary has the highest VAT rate of 27 percent amongst OECD nations. The rate of VAT in GCC is expected to be on a lower side around 5 percent.
When will VAT be implemented?
The GCC member countries have entered into a unified agreement which binds them to implement VAT and Excise regulations in their jurisdictions latest by January 2019. All the member countries will have their separate legislation and are in process of drafting the same. The website of Ministry of Finance of United Arab Emirates states that VAT is likely to be introduced across the UAE on January 1, 2018. The rate will be low and is likely to be 5%. Kingdom of Saudi Arabia will also be implementing VAT from 1st January 2018. Oman, Qatar, Kuwait, and Bahrain have also signed the VAT treaty and VAT is expected to be introduced in all GCC countries by 2018.
Pricing Structure and Profit Margins
Restructuring of Business Model
IMC is a cross-border advisory firm focusing on the AMEA (Asia, Middle East, and Africa) markets. We specialize in corporate advisory services, global mobility services, private client and family advisory, international tax, corporate finance, mergers and acquisitions, investment advisory and business support and outsourcing solutions. IMC has been operating in GCC for over 10 years. We have a dedicated “VAT in GCC” team set-up in Dubai, UAE.
How can IMC assist you?
IMC’s comprehensive approach to tax advisory comes from a thorough understanding of ground realities and decades of experience of serving clients around the world. You can trust us your partners in successful adoption of VAT practices in your business and being 100% compliant. Our team is involved at every stage of the process followed by a post adoption review and continuously updating you about the amendments in the laws. We classify our scope of work as follows:
Assistance in Implementation
IMC’s Experience and Expertise