Being ready for GCC VAT introduction when operating SAP

GCC

The Governments of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar (status unknown due to GCC politics/friction), Saudi Arabia and the United Arab Emirates that make up GCC – are committed to form a common framework for the introduction of value added tax (VAT) in the region. In order to achieve conformity within the GCC, it is anticipated that the six member states will all aim for implementation of VAT during the period commencing 1 January 2018 or by the end of 2018.

VAT as a process will affect many aspects of businesses operating in the GCC and will require significant time to plan, and integrate into existing processes. The objectives:

  • To be ready in time and a need of an effective and efficient work process between Tax function, IT function and its third party consultants
  • To optimize its VAT deduction and to automate this VAT process as much as possible in SAP
  • To limit VAT risks and meet VAT reporting obligations (e.g. reverse charge mechanism to avoid non VAT compliance)
  • To automate VAT processes via enhancing the SAP ‘as is’ functionality where possible
  • Set up processes and controls when VAT automation is not feasible
  • To test new SAP functionality prior to go-live (sandbox)

Based on above objectives the PDF document ‘More detailed description of Work in booklet’ [see link below] established the scope, schedule and means of initiating the work to be performed by the service provider and describes or references the specifications, instructions, standards, and other documents, which the service provider shall satisfy or adhere to in the performance of the work.

The KEY Group is supporting one of the largest multinationals with the setup of the GCC VAT rules in SAP itself

Read more: Implementation activities in SAP IMG for VAT

About Richard Cornelisse

I advise multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework. I started my career as a manager at Arthur Andersen and then became a partner in EY where I led the indirect tax performance team for Netherlands and Belgium. Currently I am a senior managing director of Phenix Consulting. I have over 20 years’ experience advising clients on international VAT issues. I am specialized in the tax aspects of financial transformations, shared service centre migration, and post merger integration work. I am also somewhat of a mentor, giving back to the profession. If you are interested in conversation and discussion, please feel free to contact me.
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