Business & Money | Thursday 14 April, 2016 12:24 pm |

With the Saudi Arabia Ministry of Finance announcing in its 2016 state budget plans to introduce VAT in coordination with other GCC countries, PwC held a workshop in the Kingdom to update businesses in the GCC on the latest VAT developments and implications related to its introduction. The workshop is a part of PwC’s region-wide initiative, in collaboration with PwC’s Academy to prepare local businesses and individuals on the challenges that are likely to be faced during the transition.

Commenting on this, Jeanine Daou, PwC Middle East Partner and Indirect Taxes and Fiscal Policy Leader said, “An understandable question we often receive is ‘what steps should be undertaken now, when the legislation is yet to be issued?’, three main areas to focus on are 1) Mapping the business transactions and modeling what could be the business impacts, 2) Assessing the  systems and  processes that will be effected by VAT as part of shaping the VAT implementation project and 3) Reviewing existing contractual terms to accommodate the introduction of a new tax. On the latter point, companies may be forced to absorb the impact of VAT if the contracts are not amended”.

Mohammed Yaghmour Zakat and Tax Leader- PwC Saudi Arabia said “PwC’s recent ‘Managing Tax’ survey highlights the importance of investing in technology that will help manage the additional workload likely to result from a VAT introduction.  The clients we surveyed recognised that making the required system changes for VAT would be a major challenge.”

The workshop speakers concluded by stressing the importance for businesses to start assessing the VAT impact at an early stage to guarantee that resources and skilled people are in place to deal with the VAT implementation requirements and while there is no legislation published yet, preliminary discussion and preparation can be based on experience of how standard VAT systems work across the globe and the issues to consider in order to be VAT compliant.

PwC Middle East’s Indirect Tax team has dedicated VAT resources based in the region with extensive international experience working with companies and tax authorities in other VAT jurisdictions, including Arabic speakers.