Deloitte Middle East advises businesses from different sectors in GCC region to look into their VAT preparations before January 2018, the start date of VAT implementation in the GCC.
“The construction and real estate sectors are complex from a VAT perspective and this carries significant VAT risks, especially in respect of long-term contracts; therefore, businesses are well advised to consider the impact of VAT as soon as possible,” said Nurena Tarafder, Deloitte Middle East real estate and construction industry VAT leader.
On 16 June 2016, ministers from the GCC met in Jeddah, KSA and agreed to introduce the VAT in each of their nations as a measure to raise revenue to achieve government objectives whilst preserving the neutrality for businesses. Governments have been considering the need to diversify income sources, which is even more the case given the developments negatively affecting government revenues in the region such as reduced income from oil revenues.
“If designed and operated correctly and efficiently, it can provide significant revenues with limited administrative costs and impact on business,” PwC analyzed.
Preparing for January 2018, Deloitte Middle East issued series of documents to illustrate impacts of the tax on specific industry types.