VAT Consultant in Kuwait

What to expect from VAT in Kuwait?

The new VAT regulation in Kuwait will be similar to the VAT Framework Treaty. It would form the basis of domestic VAT legislation in Kuwait. The framework needs to be followed by all the GCC countries with all key regulations of the VAT law.

VAT Framework Treaty provides that VAT on the supply of goods or services within the scope of VAT will be charged at a rate of 5% unless the goods or services are exempt or zero-rated. The Member States have been granted the flexibility to choose whether the supply of specific goods or services is considered as zero-rated or exempt.

All representatives of the Member States of the GCC including Kuwait confirmed the introduction of a VAT law across all Member States through the signing of a VAT Framework in 2017. The framework acts as white paper for the VAT legislation in each Member State by stipulating certain rules. It must be followed in spirit by all member countries with the option to opt for different VAT treatments concerning some supplies.

Kuwait is planning to implement a VAT regime from 1 April 2021. The VAT is being introduced as Kuwait is looking for revenue options other than oil. Oil prices in Kuwait have fallen drastically in the past few years. So far, only Saudi Arabia, UAE, and Bahrain have implemented VAT.

The distinction between zero-rating and exemption is an important one; in both cases, VAT must not be accounted for on the supply, a supplier making exempt supplies is generally not allowed to recover input VAT concerning such supplies. Recovery of input VAT incurred concerning zero-rated supplies is generally allowable.

Must zero-rate:

Must exempt:

May zero-rate:

Can zero rate or exempt:

How can Businesses prepare for VAT in Kuwait?

Implementation dates of VAT in Kuwait are uncertain but there is no reason to delay thinking about steps your business should take to be ready. Preparation is important because VAT liabilities are self-assessed, with errors often subject to severe penalties and time-consuming interactions with local tax authorities, or worse, causing business disruption. Businesses need to identify and claim necessary resources. VAT implementation projects take around a year.

VAT Action Plan for Businesses

Assess VAT readiness with GCC VAT and Develop roadmaps to identify the work necessary to be ready to submit VAT returns.
Interpret all future VAT liabilities and compliance obligations by reviewing the transactions.
Review and update contractual arrangements with vendors and customers for paying and accounting for VAT.
Build or buy a tool to prepare VAT-compliant invoices and Set-up a process for computation of the VAT collected.
Train yourself and your staff to manage all the items listed above.

Aviaan Accounting VAT Implementation Process

We maintain a high-quality system of accounting to provide the best VAT services in Kuwait to clients. Here is how our team implements the VAT process:

Assistance by our team in VAT registration.
Analyze the VAT deployment impacts on clients’ business.
Analyse accounting requirements and IT systems of your business in Kuwait.
Assessment and filing of VAT returns by our qualified team
Assist in VAT refund processing and claims.

Aviaan Accounting VAT Services in Kuwait

The following are the types of VAT services in Kuwait we offer at Aviaan Accounting:

Consultancy: Our team of consultants will help you with VAT registration. They maintain a record of clients’ tax invoices to avoid any penalties.

Agent Appointment: We fix clients’ up with VAT agents experienced in handling VAT for an appointment.

Deployment: Our team will help you with the tax process transition since we are experienced in working with VAT in different countries.

Compliance: Our team of VAT consultants will help clients in compliance requirements according to Kuwait VAT law to make sure that you file your VAT return on time.

VAT Filing: Our VAT consultants will help clients’ record client invoices and file return the right way, and at the right time, so you don’t get a penalty.

Registration of VAT: Our team of VAT consultants helps you with online VAT registration with the concerned authorities. It will help you stay clear of the VAT registration documentation.

Readiness Assessment of VAT: Our team offers a VAT readiness assessment for clients’ business with VAT application.