By Mansour Albakr, PHRi, SHRM-CP
08 September 2017
08 September 2017
VAT (value added tax) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service.
The tax is set at 5% and will apply to almost all goods and services except basic food items, education and healthcare. Every business function will be affected, from IT and human resources through to procurement, finance, and marketing. This gives companies less than four months to prepare and become VAT compliant by the 1st of January 2018.
VAT registration, reporting and payment will be performed online through the Saudi General Authority for Zakat and Tax (GAZT) portal.
VAT Impact on Human Resources
VAT impact on human resources requires education, training, communication, and specialist skills from various departments in the organization including but not limited to, VAT accounting analyst, business analysts and VAT ERP experts. It’s important to take into consideration whether these resources are adequate and whether they will be readily available.
Human Resources need to analyze if the skills & competencies are available in-house to set up a VAT compliance internally or to explore outsource tax advisory to manage VAT.
It is advisable to view VAT compliance as a company-wide challenge. Every business area, from human resources to information technology, will need to play a part in getting the organization VAT ready.
Please contact us to discuss how our team can assist you recruit the necessary human resources to enable you to properly implement VAT.