Dubai-headquartered regional law firm BSA Ahmad Bin Hezeem & Associates LLP has launched UAE’s first VAT’s App during Gitex 2016 aimed at addressing the needs of people, who would want to know more about the impact of value added tax (VAT) on their business and once the legislation is final, have a simplified calculation tool.
The app will soon be available on the Apple Appstore and Google Play Store. Senior Management from the law firm are present at GITEX to answer the queries with regard to VAT and a host of other solutions within the legal framework in Sheikh Saeed Hall S2-A21 and S3-A21.
The UAE will start implementing VAT at a rate of five percent from January 1st, 2018. Value Added Tax (or VAT) is an indirect tax and is levied on supplies of goods and services. Although certain business sectors such as education, medical services and social services will not be liable to charge VAT on their services and just over a hundred essential food items will be exempt from VAT, the implementation of VAT in the UAE will affect all businesses across the spectrum. According to the recent estimates by the International Monetary Fund (IMF), a VAT rate of five percent would create additional revenue equivalent to approximately 1.5 per cent of the UAE’s gross domestic product of between Dh10 and Dh12 billion per annum.
Dr. Ahmad Bin Hezeem, Senior Partner of BSA Ahmad Bin Hezeem & Associates LLP, said, “This is a step ahead in the VAT direction. We are proud to be one of the sponsors of the 36th GITEX Technology Week and are equally delighted to launch our very first mobile application on value added tax. We received a lot of enquiries from our customers and we wanted to support them. Our team them decided to capitalize on the power of technology and created this useful app that will come in handy for the industry stakeholders while calculating their VAT. We look forward to working together with Smart Dubai Government to achieve its 2020 Dubai vision.”
“As the sole participating law firm offering a variety of legal services in the Middle East region, we are honoured to be associated with the high caliber of government departments, technology companies and individuals at the show. Technology is an area that has seen exponential growth in the last decade and it will immensely contribute towards streamlining the VAT framework,” added Dr. Ahmad.
“VAT is a global phenomenon as it has been rolled out in over 150 countries which include the EU, Australia, Singapore, Canada, Malaysia and a number of MENA countries. VAT is charged at each stage of the ‘supply chain’ cycle. This particular app is designed to collect information from the consumers, analyze their requirements and answer the queries with the click of a button,” added Jimmy Haoula, Managing Partner at BSA Ahmad Bin Hezeem & Associates LLP.
John Peacock, a Senior Associate and the contact person regarding VAT at this law firm, said that “The implications of the imposition of VAT on companies is complex to say the least. Once registered for VAT, companies will have to charge VAT on all services provided which will include both once off and recurring provisions of services, such as, amongst others, monthly licensing fees charged. Against this VAT collected, all supplies and services on which VAT will be paid by the company will be able to be set off and the net VAT amount will have to be accounted for and paid to the Government on a regular basis. Accordingly, there will be numerous administrative, legal and accounting function adjustments required to existing systems to enable the smooth transition into the VAT environment.
From a corporate level, the existing business structures may not be efficient for VAT purposes and may lead to VAT being payable by the company due to its existing internal functioning and licensing agreements (especially between free-zone entities holding IP rights and on-shore entities operating under license of these free zone entities) which may lead to the company being out-priced in the market. VAT awareness for all involved from management to sales staff will be imperative so that VAT issues are handled correctly to avoid unnecessary expenditure or even the payment of penalties by the company due to a lack of knowledge, unpreparedness and particularly contract conformity with the requirements for VAT.
VAT will impact each and every aspect of any business enterprise in the UAE, whether registered for VAT or not. The law firm will inform the stakeholders with regard to the latest updates on VAT regulations through its website and social media platforms. Also as the new legislation is released, the law firm will provide for additional services and tools, to assist in this transition process.
Founded in 2001, the law firm addresses the legal needs of several sectors including corporate M&A, litigation, arbitration, banking and finance, commercial, construction, employment, fraud, insurance and reinsurance, intellectual property and real estate.
“Presently the app will ascertain the needs of the companies based on the information that they provide, such as the turnover of the company, nature of the sector among other information. The app is a handy tool for ascertaining the needs of clients regarding VAT and our team is well trained and equipped to answer all the queries that the stakeholders might have with regard to VAT,” concluded Dr. Ahmad Bin Hezeem who was also the former Dubai Courts Director General.