There has been a lot of noise over how businesses aren't quite prepared for Value Added Tax unfurling its nervously anticipate flag in the UAE on 1 January 2018. There was need, then to reinstate what one should do to be prepared. There are also many assurances that businesses would not bear the brunt of VAT. and that it would be passed on to the final consumer. But spare a thought for the final consumer: there is no talk about what a consumer could do before 1 January 2018.
Here at RSM, we thought that for a change, we should look out for you and have made a list of 5 things you NEED to do to prepare for VAT. So, here goes:
Buy that watch
If you have had your mind on that Rolex for a while now, this is the time to go cash out that dream. Come 1st January, be prepared to pay an extra 5% on all your purchases. In that sense, this could be the last chance to buy that watch at an effective 5% discount.
Change your car
Have you been postponing the purchase of a new car? Well, don't do that anymore. A 5% difference on your cost is almost equal to the interest that you'll play on your car loan for 2 years. That’s excellent reason to go and lock that price down. Do remember that for you to effectively escape the charge of VAT, you not only have to book the purchase but also get delivery of the vehicle before 31 December. Considering the high demand in the last month, and the typical demand in color and interior choices, it is best to act now.
Transfer Personal phone connections to your Company name
If you're a business owner who falls within the scope of VAT, you could convert any mobile connections that you hold in your personal name to your Company name. What that will do is it will allow you to claim the VAT on your telecommunication bills as input tax against the VAT payable on your business sales.
Get into the habit of cutting down on non-essential spending
As everything non-essential is 5% more expensive, it only makes good sense to cut down on binging on online or in-store purchases. Window-shopping goes out the window.
Settle your new year bill before the clock strikes 12
A fancy restaurant having dinner on the 31st of December sounds like just what the doctor ordered to end an eventful year. Make sure you settle your bill before the New Year’s toll of the clock, since all invoices starting 1 January 2018 00:00 hours would expect a payment of an additional 5% as VAT. Pre-booked and paid-for dinners and parties will escape this tax. Restaurants may consider the impact of VAT on their new year dinner pricing but think of it this way: that’s the last meal you’ll enjoy before paying VAT on it!