VAT in the Middle East - GCC

The introduction of Value Added Tax will be a significant change for businesses. VAT has a broad scope and businesses will need to consider the impact of VAT on all their transactions and the potential impact on prices and margins.

Business impacts
You should be aware of:

The potential effects on margins and pricing
The tax impact from VAT leakage
The impact on cash flow: funding of timing differences between paying VAT and being paid by suppliers and receiving any refunds
The VAT issues when undertaking deals

Sales & Marketing
VAT treatment of sales and exports
Effect on demand from price increases
Determine a pricing strategy and impact on payment terms
Design and roll out of customer communications
Assess the impact on current contracts and commercial arrangements

Procurement
Ensure the VAT treatment of purchases and imports is considered
Procurement strategy in terms of input VAT capture
Establish vendor communication plans
Assess the contracts and arrangements