The GCC council has set the stage for VAT implementation from the start of this year or in the first quarter of 2018, and the member states of the United Arab Emirates and Saudi Arabia have issued a formal announcement and implemented VAT law in their respective provinces.VAT in GCC comes with a certain flexibility,and the member states can take advantage of this flexibility to draft VAT law according to their local business and regulatory regime.
Oman is yet to implement VAT, and businesses should seek guidance to avoid penalties and issues of non-compliance. They should have adequate knowledge to tackle the potential scenarios of VAT in Oman like the updating of accounting and IT systems and revision of contracts. As the VAT liabilities are self-assessed, it often leads to severe penalties or interference in daily business activities.
Along with the other member states, Oman is planning to levy a 5% VAT which is also an indirect tax levied in every stage of economic activity in the supply chain, and this move is a game changer in the area of the indirect tax levy.
Here are some of the ways through which a business can prepare for the forthcoming announcement of VAT in Oman:
- Calculate the impact of VAT In GCC and VAT in Oman if the business has an extensive presence in GCC or just in the state of Oman.
- Assess whether the business comes within the mandatory threshold, if yes what are the provisions and steps to be taken for the VAT compliance,
- Develop a resourcing plan to estimate the necessary work and updating of the systems to accommodate the requirement of the VAT.
- Review and revising the internal framework of the business, and internal VAT compliance teams for monitoring and devising reporting mechanisms,
- Review and update the existing contracts to include the VAT requirements and ensure all the involved parties are aware of the responsibilities of reporting and accounting of VAT provisions.
- Including the necessary contractual revisions in the existing contracts and appraising the vendor of the changes required in managing VAT costs in vendor contracts or future pricing rate in customer contracts.
- Training employees on VAT compliance and the updating practices of IT and governance,
- Review and implementing the necessary changes in the business framework and models,
- Review and updating of the existing and future contractual arrangements with a view of accommodating the VAT law in the with an effect that might impact on the corollary obligations.
These are the changes that business to absorb the provision of VAT in Oman and maintain its position in the market post VAT in GCC.
For more information on VAT implementation in Oman, reach our consultant at [email protected] or log on to www.intuitconsultancy.com
