23/4/2018
Legislative framework is ready for the implementation of VAT in Qatar and Qatari companies need six months to be ready for the same, it was announced at a seminar here.
The seminar on “The Impact of VAT Compliance on Energy Sector in Qatar” stressed the need for comprehensive and transparent tax solutions that ensure managing resources, facing regulatory framework and meeting technological developments.
At the seminar held at Qatar Chamber’s headquarters on April 23, five speakers discussed the impact of VAT on the oil and gas sector, as well as the lessons learned from the GCC experiment.
The seminar, which was organised by the International Chamber of Commerce-Qatar in collaboration with Thomson Reuters and Ernst and Young and was supported by Qatar Chamber, was attended by professionals from various fields of business and commerce in Qatar.
Jennifer O’ Sullivan, Partner and VAT implementation leader, Ernst & Young Qatar, said the GCC countries signed the VAT Agreement in 2016 paving the way for its introduction throughout the bloc in 2018. It’s going to be the consumers, or the final customer, who will be paying the tax, she noted.
While pointing out that there are three treatments for the VAT compliance, including 5%, 0% and exempt, O’ Sullivan noted that any country in the process of implementing the tax should be ready 12 months ahead of the deadline.
She said she expected all the GCC countries to apply the tax by 2019, while noting that all companies would be prepared before the tax enters into force.
On the long-term contracts, she said if the company is committed to such contracts, the transitional rules say that regardless of these contracts, the import operations are subject to VAT once it comes into force.
Finbarr Sexton, Partner and MENA Indirect tax leader, Ernst & Young Qatar, said that VAT is not a financial matter, but a constitutional process which is related to all businesses.
He affirmed that all contracts should be reviewed to include the VAT compliance to avoid any challenges in the future.
Pierre Arman, the Market Development Lead for the Tax & Accounting Division at Thomson Reuters MENA, said that companies are required to apply the VAT according to the country’s executive regulations, especially in preparing the tax data for regulating bodies.
He said he also expected the oil and gas companies to unify their enterprise resources planning system.
Mehrdad Talaifar, Associate Partner, Tax Technology and Transformation, Ernst & Young, highlighted the impact of VAT on large and medium institutions and ways of preparing IT and financial departments of companies to deal with the tax.
Talaifar noted that the tax compliance in many GCC countries raised many issues which should be considered before implementing the tax in Qatar in order to avoid any defects or obstacles in the future.
He assured that the general frame of the VAT in all countries is similar, noting that one of the most common difficulty faced by companies is the failure to be ready for the implementation properly, as well as the delay in preparing accounting and IT systems.
Francois Malan, Senior Manager – Indirect Tax, Ernst & Young, said that the period of six months for Qatari companies to prepare for the tax is enough, noting that some countries in the region applied the tax surprisingly without sufficient preparation.
He said ten percent of the institutions and companies in the countries that applied VAT in the region, were entirely prepared to implement the new law. Whereas the other 90 percent of the companies adopted solutions and delayed measures in preparation for applying the tax, where despite of using outsourced help, they were not able to apply the tax successfully.
