It is a known fact that VAT is charged at each step of the value-chain, thus it requires a professional firm which can incorporate VAT wherever required. Aviaan Accounting support companies from multiple industry sectors and fulfil all VAT requirements. Our team of professionals offers:
- Timely, accurate, and high-quality VAT service in Kuwait
- Cost-effective VAT service
- VAT return filing
- VAT registration and implementation
Value-added tax (VAT) is a consumption tax placed on goods or services whenever the value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that has already been taxed. Qatar is planning to implement a 5% VAT regime from 1 April 2021 as Qatar seeks to rebalance its reliance on oil revenues.
Qatar and representatives of the other Member States of the Gulf Cooperation Council (GCC) confirmed the introduction of a VAT law across all six Member States through the signing of a VAT Framework in 2017. The Treaty acts as the basis for the VAT legislation in each Member State by stipulating certain principles. It must be followed by all members while allowing the countries to opt for different VAT treatments concerning some supplies.
What is VAT Framework Treaty?
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.
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.
Key features expected in Kuwait VAT regime
- VAT law and Executive Regulations
- Zero-rated for exports, medicines, or international transport
- Exemptions for financial, health, education, or real estate services
- Imports subject to VAT
VAT Action Plan for Businesses in Kuwait
- Assess VAT readiness with VAT and develop a plan to identify the steps necessary to be ready to submit VAT returns.
- Understand your transaction to determine all future VAT liabilities and compliance obligations.
- Review and update contractual arrangements with vendors and customers to determine each party is aware of its responsibilities for paying and accounting for VAT.
- Develop or Purchase software to prepare VAT-compliant invoices and incorporate a process to summaries the VAT collected on invoices.
- Educating and Training staff to manage all of the above activities.