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Tally for Vat

Tally. ERP 9 is your perfect business management solution and VAT compliance software. With an ideal combination of function, control and customizability built in, Tally. ERP 9 permits, business owners and their associates to manage more.

Tally.ERP 9 is a complete product that retains its original simplicity yet offers comprehensive business functionalities such as Accounting, Finance, Inventory, Sales, Purchase, Point of Sales, Manufacturing, Costing, Job Costing, Payroll and Branch Management along with compliance capabilities for VAT.

What is even better, you can use all your time, energy and resources for strategizing, expanding and taking your business to greater heights. Make technology your business partner. Integrate, automate, and grow with Tally.ERP 9.

Introduction to Tax System

The Gulf Cooperation Council (GCC) announced the introduction of a new tax system VAT-Value Added TAX in all its member countries - United Arab Emirates (UAE) Kingdom of Bahrain, Kingdom of Saudi Arabia (KSA), Sultanate of Oman, State of Qatar and State of Kuwait. Ever since it was announced, there has been an increased demand among businesses in these nations to understand the taxation subject well in advance and to be prepared, as certain existing business practices will have to undergo changes. On this note, as the first out of a series of articles on GCC VAT, we are providing a brief about the Introduction to taxes.

Introduction to VAT in UAE

With each passing day, we are moving one step closer to the implementation of VAT in UAE. VAT in UAE is a general consumption tax which will be levied on the majority of transactions of goods and services unless specifically exempted by the Law. Under this, VAT is charged at every stage of 'Value Addition' in the supply chain and the mechanism of Input tax deduction ensures that the businesses act as tax agents or tax collectors of the government, who collect the tax from the end consumers, account and pay the tax. Ultimately, the end consumer pays the tax.

The government authorities are working in full swing to implement VAT in UAE and following are the key milestones achieved in the process of implementing UAE VAT Law:
1. Draft UAE VAT Law was made available in MOF
2. Federal Law on tax procedures was released
3. VAT Decree Law was released
4. Online VAT Registration is opened in FTA portal
Finalization of UAE executive regulation will be the next big task in the process of implementing VAT in UAE.

VAT Implementation in UAE

VAT is expected to be introduced across the UAE on 1st January, 2018. The Kingdom of Saudi Arabia and UAE will be the first 2 member countries of GCC to implement VAT. The other member countries such as Bahrain, Oman, Qatar and Kuwait are expected to implement VAT in the middle of 2018 or beginning of 2019.
A standard rate of 5% will be levied on the supply of goods and services in UAE. However, there are certain supplies such as local passenger transportation, specified financial services, healthcare, exports outside GCC and so on, which will be either zero-rated or exempted from VAT in UAE.
Only when 'Executive Regulations' for VAT are released, clarity on the conditions and controls for exempting the supplies mentioned in UAE VAT law will be available.

Business Readiness for VAT

1st January, 2018, is the expected date for VAT Implementation in UAE. The time available, just about 2 months from now, is crucial for businesses to prepare themselves towards the new taxation system and be 'VAT Ready'. Being 'VAT Ready' does not mean your readiness as on 1st January, 2018, it signifies about today's readiness for VAT.

First of which is about ensuring that all the financial transactions are recorded and books of accounts are accurate and up to date. This is because, the books of accounts will act as evidence for minimum annual turnover threshold limit for registration and on this basis, either you will be mandated to register or you can request for exemption from registration.

Secondly, being 'VAT Ready' means, you have to charge VAT on supply of taxable goods and services, account the VAT paid on the purchases such that Input tax deduction can be claimed and finally, you have to file online VAT returns on a regular basis, disclosing the details of VAT charged and paid.

Therefore, the first immediate step toward VAT readiness will be to explore the best VAT Software which will not only help you to be VAT compliant tomorrow - when VAT is implemented in the country but will also help you transit seamlessly into the new VAT era.

Apart from exploring the best VAT Software, it is imperative for businesses to understand the fundamentals of VAT and the business implications. We foresee that businesses may have to make changes to their business operations, financial management, book-keeping and so on, to fully comply with the VAT requirements. The following are few key tasks for your VAT readiness:

1. Explore best VAT Software - Adapt and Align with your business activities
2. Build the organizational competency by educating your teams on the fundamentals of VAT and its impact on your business
3. Review your business processes, practices and procedures - mainly pricing, procurement, invoicing, logistics etc. in line with VAT requirements and align accordingly
4. Ensure books of accounts are accurate and update date
5. Inform your vendors and customers about VAT and subsequent impact on transactions
6. Preparation &Transitioning to VAT