Implementing VAT in your business as deadline looms
Deltek explains what VAT will mean for your business and how it can help with implementation and compliance
The 1st of January 2018 marks a major milestone for architecture and engineering businesses in the United Arab Emirates (UAE). As of this date Value Added Tax, or VAT, will be compulsory for businesses operating in the UAE with an annual revenue of more than $100,000 (AED375,000) and will be charged at the rate of 5%.
As a mandatory tax, those businesses that fail to comply with the stringent VAT regulations may encounter severe financial penalties.
What does VAT mean for your business?
Architecture and engineering businesses like yours will need to register for VAT and submit VAT returns quarterly.
You will need quick and easy access to the right reports and information to submit returns and demonstrate compliance. In order to produce these reports, and avoid unnecessary manual work or penalties for non-compliance, you will need to manage and maintain accurate financial records.
Unfortunately it’s not as simple as tacking a percentage on top of every transaction in order to be compliant.
There are specific requirements for tracking and reporting, such as correctly coding all accounts payable and accounts receivable transactions. To ensure compliance, you will need to review your IT infrastructure to determine if your current systems are robust enough to handle these complex processes.
What systems do you need to implement VAT?
Organisations often don’t have the right systems in place to support compliance with VAT requirements. For example, having an Enterprise Resource Planning (ERP) solution in place is critical.
Effectively, ERP integrates an organisation’s business information - including finance and accounting, customer relationship management (CRM), human resources (HR), resourcing and project management – all of which will be affected in some form by the introduction of VAT. ERP will enable your business to quickly and accurately track, manage, report and audit financial details, along with the other core financial, resource and project management functions.
How can Deltek help your business comply with VAT requirements?
Deltek’s ERP solution is purpose-built for the Architecture and Engineering (A&E) industry and is used by over 12,000 A&E businesses worldwide. It offers a robust financial and project management solution that gives organisations complete visibility into their business and projects from a single, integrated platform. It’s also designed to aid VAT compliance and has done since VAT was first introduced in other countries over 30 years ago. We have the tools and expertise to help you implement the right technology to ensure your business is compliant, your projects profitable, and service delivery seamless.
To learn more about VAT compliance and prepare your business for implementation, download our free eGuide ‘Are you VAT Compliant?’