VAT consultancy consists of companies specializing in VAT providing businesses with audit and assurance, tax compliance services, accounting, and business consulting services in the area of value added tax (VAT). Many VAT consultancy companies are springing up in the UAE because of the relative newness of the tax, and most of these companies work in larger networks of global tax firms. These consultancies oftentimes have clients ranging in size from large multinational companies to small private and public sector clients.
Most VAT consultancy firms in the UAE exist to provide their clients with value added services in terms of VAT to assist them in managing their finances better. These value added services include: tax advice, cost reduction, increasing cash flow, and allowing businesses to have more control over their operations.
The most successful VAT consulting firms in the UAE employ teams of talented and experienced professionals in the area of VAT, especially how it applies to very large companies with huge international operations. These teams use local accounting standards and IFRS to provide their clients with audit and advisory services. These companies also use top notch leadership to manage their companies, and to lead them in the general direction of short and long-term success. Most VAT companies operate with the confidence that their professionals fully comprehend their clients’ needs and businesses processes, and are able to use their skills, talents, experience, and the resources available to them to provide these clients with high quality services, and deliver the results that far exceed the clients’ expectations.
These companies pride themselves on being extremely committed to every task they perform. This includes using the most appropriate resources to delivering the highest quality services in the area of VAT possible. These companies deploy teams of licensed, highly qualified, and specialized Accounting professionals and Chartered Accountants who utilize the latest accounting software programs, and are abreast with the latest accounting laws to deliver amazing results for their clients.
The UAE Minister of State for financial affairs, Obaid Humaid Al Tayer, implemented the VAT tax of 5% on January 1, 2018. Basic food items, healthcare and education are exempted from this tax. The UAE is part of the GCC states which collectively are planning to approve the long anticipated common framework which will support the VAT in the member states. The common VAT framework will also form the basis by which each member state will introduce a national VAT.
The UAE member states still have some challenges to work through before the VAT becomes fully functional in the UAE, but the tax is intended to provide state governments with much needed revenue which will allow them to continue to deliver basic public services to the citizens of the UAE. This tax will also allow the UAE member states to invest in industries other than oil so as to further diversify their national economies – most of the revenue in the UAE is still derived from oil industries, which the world is slowly moving away from.
The UAE governments have established and implemented clear regulations and effective administrative processes to allow the VAT to be successful. They have identified the VAT strategies that will lead to most efficient expedition of this tax, and they have identified those government and private contracts which need to have VAT applied, among other things. They have also trained government staff on the implementation and application of VAT so that they can advise businesses in the transition period.