VAT Leader In case of enquiries, please contact our team:

KPMG in the Lower Gulf VAT will impact:

VAT
The GCC states are working together to While VAT is not intended to be a tax on
develop a broad framework for the introduction business, collecting the tax and remitting it to
Director | VAT Leader Partner | Head of Tax
T: +971 4 424 8932 Suppliers pricing of VAT. The framework agreement will set the government will have significant
rcosta1@kpmg.com ahariharan@kpmg.com
M: +971 56 415 8738 A/P invoice processing time out the underlying principles of VAT laws for compliance costs. There could also be cash

implementation
T: +971 4 424 8932 T: +968 2474 9231
rcosta1@kpmg.com Purchases from non-registered the six GCC countries, although there are likely flow implications. Supply chains need to be
M: +971 56 415 8738 M: +968 9932 4874
VAT businesses to be areas where member states will have reviewed to understand the impact of VAT. VAT
Supplier education some flexibility. The UAE was among the first costs and accounting obligations will need to
GCC member states to publicly announce the be identified so they can be addressed. There

System changes
Rob recently joined KPMG in the Lower Gulf Documentation (tax invoices)
as a director. Reports for VAT returns
roadmap
Partner Manager | Indirect Tax introduction of VAT, with a proposed effective are also implications for IT systems. Adapting
nashar@kpmg.com anandakumar2@kpmg.com date of 1 January 2018. to VAT will mean updating or upgrading ERP
T: +971 4 424 8987 VAT is likely to significantly affect nearly every and IT systems and interfaces to correctly
T: +971 4 424 8999
M: +971 56 683 3219 UAE business in some way and a 1 January capture input and output VAT. Governance
M: +971 56 995 7116
2018 start date leaves only a short window for frameworks will also need to be reviewed and

Areyouready?
Before joining KPMG, Rob worked for another businesses to prepare for VAT. updated to ensure policies, processes and
Big 4 firm as GST Director, assisting with the controls comply - and continue to comply - with
implementation of Malaysia's goods and VAT legislation.
Samples/marketing
services tax (GST).
Pricing strategies
Rob has provided a broad range of taxation
Returned goods
advisory and consultancy work for over 30
Education of - and communication
years, with a particular focus on VAT/GST. He
was Vice-Chairman of the OECD Working with - consumers
Party that has been developing international Credit items
VAT guidelines for cross-border services and Sale material
AED1000 + AED50 VAT
is a key contributor to many international
forums on VAT/GST, including the global VAT Existing and new contracts Sale product
forums held in 2012 and 2014. Are any payments based on revenue
AED2000 + AED100 VAT

or turnover (franchise or royalty AED50 AED100

arrangements)?

AED50 AED100

As well as advising governments on VAT and

GST policy issues, including drafting legislative Bad debts
amendments, Rob has advised local and Deposits/advanced payment AED150

multinational companies in Australia, Malaysia Leases and hire purchase Government

income AED250

and the Lower Gulf (including Oman) on Loan of stock and equipment
VAT/GST implementation, compliance and VAT return preparation
restructuring opportunities. Disposal of assets
Sales of scrap
Fringe benefits
Gifts to employees
Employees allowance and claims
The information contained herein is of a general nature and is not intended to address the circumstances
of any particular individual or entity. Although we endeavour to provide accurate and timely information, AED250 AED150
there can be no guarantee that such information is accurate as of the date it is received or that it will
continue to be accurate in the future. No one should act on such information without appropriate
Sale product
Sale product
AED3000 + AED150 VAT
professional advice after a thorough examination of the situation.
AED5000 +
2016 KPMG, KPMG LLP and KPMG Lower Gulf Limited, registered in the UAE and member firms of the AED250 VAT
KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. Printed in the United Arab Emirates. The KPMG name *The example is calculated using a VAT
and logo are registered trademarks or trademarks of KPMG International. rate of 5% on a taxable supply.
 PLAN AND ANALYZE
Identify project resources
Map supply chains
Map business units and systems
Document key VAT touch points
incorporate these into the VAT impact
assessment (phase 2)
Review existing long-term contracts which
straddle VAT implementation
Consider VAT clauses in new contracts and
tender documents
Identify key stakeholders
Finalize and agree communication plan for
staff, suppliers and customers
Identify impact of VAT for senior
management
Provide inputs on VAT's IT impact
Map all relevant processes, transaction
flows and tax touch points
Review existing contracts to identify the
material impact of VAT
Project implementation plan
Resource plan
Roles and responsibility matrix
Communications strategy and materials
Presentation to senior management
Business process impact requirements and
matrix
Overview of impact and high level resolution
plan
Recommendation of VAT clauses
DESIGN AND IMPLEMENT
Review legislation - when released - to
validate VAT touch points identified in
phase 1 - classify transactions for VAT
Build input tax credit allocation model
Agree requisite IT changes with IT vendor
Build log to monitor and resolve issues
where the law or its application remains
unclear
Log transitional provisions in the long-term
contracts register
Determine tax drivers and functional design
requirements
Identify VAT decision flags based on legislation
Assess impact based on existing and future
business plans
Review existing configuration
Analyze VAT requirements against existing
system functionality
Define solution architecture
Review and validate functional and technical
documents
Review configuration design documents
VAT issues and ambiguities log
Documentation of implementation
decision points
Impact assessment model
IT impact assessment report including:
Solution architecture design
Functional ERP requirements
Impact on customizations
Master data assessment
Reporting requirements
TEST, TRAIN AND REGISTER
Validate the impact assessment
Action issues in log
Validate applicable transitional provisions
for long-term contracts
Test VAT systems (IT vendor)
Ensure VAT system reports are sufficient
Train staff
Register for VAT
Develop user acceptance test scripts
Support end user testing
Review VAT compliance reports
Prepare training calendar
Review end user training material
Develop VAT user manual to support ongoing
adoption
Advise on registration
Advise on applicability of special VAT schemes
(such as forming a VAT group)
User acceptance test plan
User acceptance test scripts
User acceptance report
Tax reporting and filing test
Reviewed training manuals
VAT process maps and manuals
Registration completion report and review
GO LIVE
Test exceptions
Prepare and file VAT returns
Resolve any teething issues
Fine-tune compliance practices
Support throughout submission Assist with - or review - VAT
Report on gaps and lessons learned returns prior to submission
Maximize VAT recovery on business inputs
Reduce adverse impacts on cash flow
Ensure compliance with VAT obligations and reporting
Minimize risk of fines, penalties and reputational damage