Korean companies in the UAE were briefed on the implementation of VAT and the immediate effect it will have on their projects across the GCC by EY at a seminar in Dubai.
The seminar was held under the auspices and with the support of Korean Business Council (KBC) in Dubai and Korea Trade-Investment Promotion Agency (Kotra).
The seminar was attended by Heo Namduk, Consul General of the Republic of Korea to Dubai; Gene S Cha, Chairman of KBC (Korea Business Council); Yong Suk Kwon, Regional President of Kotra Mena head office; and over 230 C-suite executives, tax specialists, financial controllers and heads of departments from Korean companies based across the GCC.
Alok Chugh, EY Mena Tax Partner and EY Leader of Korea Business Network, said: “Korean businesses play a significant role across the GCC. With the recently announced VAT legislation, Korean businesses need to take the necessary steps to ensure full compliance and avoid any potential penalties.
"At this stage, with only a month until VAT rollout, all companies should be registered, completed a VAT impact assessment, and designed their systems and processes for VAT implementation. However, the reality is that many companies have not even started their VAT compliance requirements. It takes time to build out the VAT capability, requiring careful planning and a structured program to ensure that the business is VAT ready, including people, processes, controls and technology. This will have a major impact on Korean businesses across the GCC.”
EY experts discussed the various stages of VAT implementation including: VAT introduction timing and relevant law structure, basic principles of VAT law and regulation, and VAT implications by industry.
“Many companies are concerned about how VAT will be rolled out in practice and whether the systems of their clients and associates would be prepared for VAT. This is a concern that many industries share, however any further clarity will only be known once VAT implementation has begun. Companies must prepare for VAT regardless of any uncertainty,” commented Alok.
The EPC (Engineering, Procurement and Construction) sector in particular was vocal about how VAT would impact their business. A major concern was whether the VAT cost would be on-charged to customers or whether the companies would bear the cost themselves.
“VAT impacts every phase of the tax life cycle. It can also have a significant impact on company bottom lines. The complexity of VAT and the challenges posed by the introduction of a VAT regime to a region that has, to date, not dealt with a transaction based tax framework, will make it difficult for most organizations to keep up with change. With this in mind, businesses across the region will need to focus on developing a holistic VAT strategy to manage the associated costs and demands on internal resources.” - TradeArabia News Service