Half of GCC firms will be ready for VAT by January

MUSCAT: Half of the businesses in the Gulf Cooperation Council (GCC) have said they will be ready for the implementation of the Value Added Tax (VAT) by January, a survey by audit firm Deloitte revealed.

The second volume of the Indirect Tax Survey by Deloitte showed 63 per cent businesses in the GCC believed VAT will be implemented very soon, while 32 per cent said it will eventually kick in. Only 5 per cent believe it will never be implemented.

When asked how informed they were about VAT, 58 per cent of the firms said they were very well informed. Only 25 per cent said they were well informed during the last survey this year. The GCC countries have signed an agreement to implement VAT within the next two years.

The GCC framework has already been printed in the Saudi official Gazette. United Arab Emirates and Saudi Arabia have already announced the introduction date of January 2018. Oman is yet to make an announcement and experts believe it may differ from the original January 2018 deadline to give companies more time to prepare.

“It will take around 11 months for large companies to get ready for VAT so there has to be a good amount of time given to people for this,” Alkesh Joshi, director of Tax at EY said.

Eighty per cent of businesses have said that the introduction of VAT concerns them and 72 per cent of the businesses, who have not started preparations, have said they are not sure about why they haven’t started preparations yet. 18 per cent of them said the law will not be published, while 10 per cent believe it will not happen.