With the announcement of 1 January 2018 as the go-live date for VAT, businesses will need to develop a comprehensive action plan that takes into account its impact on people and organizations, processes and controls, and data and technology. They will need to consider the following activities to be VAT-ready:
Understand key areas of impact in their business
Prepare different scenarios for the design and application of VAT
Plan for the training of existing staff and the recruitment of skilled resources
Continually track policy development regarding VAT and update prepared scenarios
Identify areas of adverse impact, assess capability of existing IT systems and manage the integration of multiple applications
Identify issues needing representation to the authorities and develop a strategy for effective advocacy
Prepare the implementation road map and align relevant teams
Facilitate sustained implementation & manage the VAT initiative in line with the strategic agenda of the business
What should businesses consider?
Value added tax (VAT) is not just an accounting or tax challenge. It impacts every part of the business with regard to cash flow, costing of capital, pricing of products and services, financial reporting, tax accounting, compliance processes, supply chain, procurement and contracting, and all technology currently enabling this ecosystem. In addition, there will be significant training needs for personnel to understand and operate effectively under a VAT regime.
The planning for readiness program to implement VAT will require proactive and timely preparation. Companies will need to start by understanding key areas of impact to their business model, and preparing different scenarios for the design and application of VAT.
A “wait and see” position to plan for VAT is deferring the inevitable. Businesses that use the available time productively will ultimately be in a better position to comply with the new regime.
How GPK Tax consultants can help?
VAT is complex, but you can address the challenges and reduce disruption and cost to your business with a pragmatic and comprehensive approach. We can help you through all phases of implementation, providing advice and recommendations for managing VAT compliance, addressing VAT costs and avoiding significant penalties:
Our Dedicated Tax Team is available to discuss and bring clarity to the specific challenges that your businesses will face in getting ready for VAT