Why should small business use experts to implement VAT in UAE

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April 16, 2024

Why should small businesses outsource VAT implementation to experts in the UAE?

With the UAE implementing VAT from 1 January, 2018 and the recent release of the Tax Procedures law small and medium-sized businesses will need to start acting now to prepare. A question they may have is the following, should we outsource this process to VAT experts or conduct this in-house? Although this is a valid question, the most important question they should be asking themselves is how complicated is this for my business? Will implementing VAT myself disrupt my business? How can I learn from the mistakes of others?

VAT will impact all areas of the business including sales, purchases, finance, legal, operations, IT, and HR. The process of incorporating VAT into accounting systems and submitting quarterly VAT returns accurately to the tax authority means that many organizations will require expert professionals with experience in VAT law and implementation. With VAT being the first type of major tax to be introduced in the UAE, the pool of talent available is in very short supply. Insourcing this process would mean hiring a VAT expert or a Project Manager to run this project. Both of whom would be expensive hires, they would need sponsorship for a visa, demand a good benefits package, and also need to be managed.

Time would also be needed to find the right candidate including conducting interviews and assessments to ensure they have the relevant skills and experience to be able to deliver the project successfully. Another reason why companies should use VAT experts as opposed to a DIY solution is that the VAT experts would bring a breath of wealth and experience in helping businesses prepare for VAT. They also keep up to date with the latest VAT developments and pass this information on to their clients. They would also typically be working for numerous clients simultaneously and therefore can share the knowledge and lessons learned during the implementation process between clients (without sharing sensitive information).

Cost can be a factor, and although larger organizations can afford to bring in VAT consultants such as the big 4 accounting firms, smaller firms such as Alpha Pro Partners can be affordable for small and medium-sized businesses and provide the same level of service. In an ideal scenario, all businesses should consult a VAT specialist to conduct a VAT impact assessment so that they can be fully aware of all VAT implications and consequences of non-compliance. Businesses should bear in mind that they have to go live from 1 January 2018 which is only a few months ahead.

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