General Implications on VAT
VAT Implementation
Value Added Tax is known as VAT. As the value of goods and services gradually rises at different phases of production, sales, and marketing, a general consumption tax is imposed.
While the government has tentatively set the VAT percentage at 5% with effect from January 2018, a few things are exempt in Dubai.
Impact of various functions
Procurement and production
- Pricing of the supplier
- Processing time for A/P invoices
- Purchases from VAT companies that are not registered
- Education of suppliers
IT
- System modifications
- Paperwork (tax invoices)
- VAT return reports
Sales and marketing
- Marketing and samples
- Strategies for pricing
- Returned items
- Consumer education and communication
- Items of credit
Legal
- Both new and existing contracts
- Revenue- or turnover-based payments (such those made under franchise or royalty agreements)
Finance
- Negligent debts
- Advanced payments and deposits
- Hire purchase and leases
- Stock and equipment loan preparation for a VAT return
- Asset disposition: Scrap sales
Human Resources
- Benefits on the fringe
- Presents for staff members
- Employee benefits and claims
