Financial Services (Banking)
VAT impacts different economic sectors in different ways. Banks need to carefully assess and classify expenses for input tax recovery purposes given they make both exempt and taxable supplies. This should be done with the objective of mitigating the risk of excess input tax recovery while reducing any input tax credit leakage. Unlike conventional finance, Islamic finance products add additional complexity requiring careful analysis to determine the appropriate VAT treatment. Given the large volume of transactional data that is generated in a banking environment, it is important to establish a clearly defined VAT control process for collection, consolidation, and validation of all relevant data for the completeness and accuracy of VAT reporting.
Our banking VAT specialists will assist you to navigate through the complexities and challenges by providing the right advice with practical solutions to the challenges faced by this sector.