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“VAT is here to stay, so businesses should use it as an opportunity” states ACCA and Thomson Reuters.
|Dubai, United Arab Emirates-Monday 23 July 2018 [ AETOS Wire ]
The ACCA & Thomson Reuters VAT Return Filing and Compliance survey has found many businesses still seem unsure about what is required of them in relation to certain aspects of the VAT regime and therefore require further clarification.
The survery also found that there were numerous organizations that highlighted they had not yet filed their returns (at the time of interview). These companies highlighted that they did feel ready, with the view that they will gain more certainty and confidence once their returns have actually been lodged.
Chas Roy-Chowdhury, Head of Taxation at ACCA states “it seems almost universally clear, while not explicitly stated in the survey responses, that businesses view VAT filing as a chance to find out whether they are indeed filing correctly and are thus compliant. There is a lot of insecurity around what is and is not correct – leading us to believe that the details of VAT compliance and reporting still remain slightly ambiguous. “
The findings also highlighted that a number of businesses have choosen to outsource their VAT projects which have resulted in an additional cost to the business. Chas continues “in an ideal world, tax collection should not add an extra layer of cost to the business or collecting agent. However, we do see from the survey that several businesses did choose to outsource their VAT compliance at significant expense, which could impact SMEs’ margins and stability.”
The importance of VAT compliance was further reiterated with Pierre Arman, Head of Tax and Accounting at Thomson Reuters commenting that “the authorities have made it clear that they will be clamping down on companies that do not take VAT compliance seriously. KSA’s General Authority for Zakat and Tax (GAZT) registered over 3,000 VAT violations in January and February. These breaches included failure to register for VAT, issuing invoices that lack the required VAT information, over-charging VAT and omitting the VAT identification number on an invoice. It has also been reported that the UAE’s Federal Tax Authority (FTA) had begun auditing firms’ compliance efforts following the first VAT return submission deadline.”
Pierre continues “technology can significantly ease VAT’s administrative burden through automation and streamlined data management. Our 2017 survey shone a light on the fact that many organizations in the GCC still needed to address the VAT readiness of their technology systems, with only 29% saying their systems were capable of supporting their VAT implementations. This year, we asked respondents how they set up their VAT determination logic. Only 4% of those surveyed had a dedicated tax engine in place. More than two-thirds (67%) were using a VAT configuration in an existing SAP, Oracle or other legacy ERP system.”
The importance of ensuring that VAT is managed as a continual improvement process was further highlighted in the report with businesses being encouraged to view the VAT regime as a ongoing opportuntity as opposed to a burden on business.
The survey questions were based on some of ACCA’s ‘12 Tenets of Tax’, with the report highlighting key principles that businesses within the GCC should also take into consideration in order to aid compliance.
To read the report, please click here.
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 200,000 members and 486,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 101 offices and centres and more than 7,200 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA is currently introducing major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com
About Thomson Reuters
Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organization. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com
About Thomson Reuters ONESOURCE
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