Intelligent Tech Channels Issue 13 | Page 50

EDITOR’S QUESTION Automating VAT practices is best way forward VAT practices are nothing new for global businesses but UAE organisations need to be well prepared for the changes says Mansoor Sarwar from Sage. A s an enterprise application vendor, what are the best practices you would recommend for end users implementing the GCC VAT module? Mansoor Sarwar is Director Technical Services and PreSales, Sage Middle East. C ompliance with the UAE VAT Law may require significant changes by a business to technology, operations, financial management and book keeping practices. The law, which comes into effect across the six Gulf Cooperation Council nations on 1 January 2018, sets administrative penalties for businesses that fail to submit required information in Arabic when requested by the Federal Tax Authority, that deliberately provides false information, and that deliberately destroys documents that were meant to be sent to the FTA. The stringent reporting and record- keeping requirements suggest that proper accounting systems and processes will form the foundation of compliance. However, the reality is that, because businesses have never had to deal with tax before, it is unlikely that their current systems and processes are VAT ready. Here are just some of the implications of the new VAT law on business accounting and record-keeping processes: Ÿ Ÿ Businesses will be required to keep 50 records of any information that can verify their tax payments and receipts, including general ledgers, invoices issued and received, credit notes, debit notes and annual accounts Ÿ Ÿ Businesses will need to keep records of the following information for at least five years: w w Tax invoices and credit notes w w Imported and exported goods and services w w Goods or services that have been disposed of w w VAT account, which includes VAT due on taxable supplies, VAT due after an error or adjustment, and recoverable tax Ÿ Ÿ Businesses are required to issue a VAT invoice, and in some cases a simplified invoice. The VAT law stipulates that invoices must: w w Be in Arabic w w Have the words Tax Invoice displayed in a prominent place w w Be in UAE Dirham and if the amount is in another currency, it must be converted to UAE Dirham w w Be issued within 14 days of the date of supply of goods or services w w Include the name, address and tax registration number of the supplier w w Include the date of issue w w Include a description of goods or services w w Include the total amount payable and the total VAT chargeable This might seem daunting to businesses that have never had to issue tax invoices and credit notes or keep accurate records of their transactional data. Businesses also need to start getting into the habit of submitting their tax returns on a quarterly basis, which can be done online through the government’s eServices platform. Some solutions are VAT ready and automate a lot of these processes, so businesses are assured that their data is accurate and up to date. Simple and easy- to-use dashboards give businesses insight into their VAT collections and payments. The software is fully auditable and makes compliance considerations like record- keeping and issuance of VAT invoices hassle-free. From a central location, businesses can easily manage their VAT returns and reporting, adjustments, payments and refunds, and can open and close their VAT periods or view the VAT payable and refundable for a certain period. It also lets businesses generate VAT audit reports that list original tax invoices and credit notes, payments and refunds, as well as a VAT summary. The new VAT law will have its biggest implications on business accounting and reporting processes. By automating as much as you can, and opting for a system that streamlines and simplifies record- keeping and reporting, you have won the biggest part of the battle.  Issue 13 INTELLIGENT TECH CHANNELS