App Development, Blog

As we all know that VAT is being introduced in U.A.E and other GCC countries. The date set for implementation in U. A. E. is 1-Jan-2018. Most of us are preparing, depending on the length and breadth of business VAT compliance can be a lengthy or not so lengthy process, lets have a quick look what it takes to be ready and to be on the winning side already.

Embrace VAT; Understand The Process

  • First things first, you need to understand the process, how the goods and services you supply and or buy are going to have an impact.
  • Do you sell Zero Rated goods, in which case, you don’t need to charge VAT to your customers. Are you selling to customers who are exempt from VAT? Do you have to use reverse charge mechanism? Do you have customers or suppliers in Designated Zones ?
  • Get a thorough understanding and make a list of different categories your customers may fall into, understand the way the invoicing will be impacted, what is needed by law to be on the invoice, i.e. the VAT registration number should be on all invoices, credit notes, debit notes to start with. It should say Tax Invoice, get a grip of whats needed.

Once you are done with the basic concept and the impact of business now you need to worry about creating efficiency in the process i.e. automating the process. Lets have a quick look at how we can achieve this goal.

  • You are using an accounting or financial package or ERP, ask the company who is the developer of the package whether they have updated the solution to make it VAT compliant. In most scenarios they are working on it or have released or have promised to accommodate VAT, in that case, you need not worry, just keep the solution updated and your process will fall into place automatically.
  • If you are vendor is not supporting or making VAT changes this is true especially if you use products developed for other markets and the vendors don’t normally update based on local regulations, then you need to look at either replacing the solution or paying the vendor a premium price to do that change.
  • It is widely known that vendors usually are expensive, to do custom changes, but you do have some other options as well, read on.

If you cant find a solution and to change an existing solution is prohibitively costly, you still have some options.

  • Identify the GAP in the solution which needs to be addressed.
  • Identify the data feeds, i.e. how will you import and export data from your legacy application. What you need as output from the solution, how is data going to be shared, stored, accessed. Note this exercise is from a process not what technology we will employ, leave that to the experts.
  • Once you have requirement sorted, you can contact any independent custom software development company to help you build a custom solution to automate the process for you, they may or may not be as expensive, but it is worth a try. Majority of the times they are not as expensive.
  • This will save you a lot of time, while you plan out your long term strategy saving money and increasing efficiency.

Also since VAT is implementation is still in its early days, processes will become more clear and mature as we move forward, you can use a mid-way approach to wait and watch and do the right thing, get the right solution at the right time.

Don’t hurry up and invest in the best solution available, as that solution might be the best on the market, but not necessarily the right one for your organization.

At MIVB we have helped many businesses do cross platform integrations to temporarily or permanently address system limitations.

Contact us for a free no obligation assessment, we will be happy to help.

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