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Value Added Tax (VAT)

Value Added Tax (VAT)

The VAT will impact all businesses in Qatar, and the tax burden can be avoided through intelligent management.

Value added tax (VAT) raises complex issues for many businesses.

Qatar signed the Gulf Cooperation Council (GCC) value-added tax (VAT) Framework Agreement (the Framework) along with all other GCC member states. The Framework requires all member states to introduce VAT and establish national legislation, within the agreed parameters. Based on the mentioned fact and recent tax improvements in the State we anticipate that VAT law will be announced during 2020. 

While VAT is not intended to be a tax on business, collecting the tax and remitting it to the government is likely to have significant compliance costs. There could also be cash flow implications.

Supply chains need to be reviewed to understand the impact of VAT, and costs and accounting obligations will need to be identified so they can be addressed. There are also implications for IT systems. Adapting to VAT will mean updating or upgrading ERP and IT systems and interfaces to correctly capture input and output VAT. Governance frameworks will also need to be reviewed and updated to ensure policies, processes and controls comply - and continue to comply - with VAT legislation.

As set out in the framework, member states retain some flexibility, such as how to treat healthcare, education and free zones for VAT purposes.

How KPMG can help

VAT rules can be complex and the full implications of implementation are not always considered.

At KPMG in Qatar, we are committed to the end-to-end delivery of solutions which help your business manage the implementation of VAT in the most effective and efficient way possible. We have a Qatar-based team of highly-skilled professionals, with experience of delivering VAT services to some of the largest organizations around the world. Our team use KPMG’s tried and tested methodology, drawing on global best practice to ensure that our clients get the results their business needs.

Our services include:

Consulting
KPMG’s Indirect Tax and Management Consulting professionals based in Qatar, together with colleagues from our offices world-wide, are able to assist clients with requirements relating to the upcoming changes, including, but not limited to nexus – the VAT taxability impact assessment study, IT strategy, sourcing and procurement, contracting strategy, cost optimization, supply chain analysis, business strategy, business process re-engineering and reviewing compliance requirements.

Technology implementation
Our Transactions Tax Systems professionals, together with our Technology and Digital Advisory team assists clients that are implementing automated solutions with their transaction tax compliance processes, by providing a holistic technology view. This includes:

  • reviewing, updating and testing IT system(s) and sub-modules
  • ensuring proper and efficient interfacing between information systems
  • generating compliance documentation and VAT reports.

Compliance

Our local Compliance Center can help clients to prepare and file new VAT returns.

Our publications on VAT

How VAT works? (diagram)

GCC VAT Framework Agreement

Events and media coverage

Click here to read our recent articles on VAT published in leading newspapers which also covers articles from some of the sector events organized in Qatar.

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