Business Reporter –
Dec 14: The much-anticipated Value Added Tax (VAT) regime due to be implemented in Oman and the wider Gulf Cooperation Council (GCC) in 2018 will adopt best practices from the European model, according to a well-known tax consultant.
Davis Kallukaran, Managing Partner of Crowe Horwath International, said VAT is now in place in around 114 countries around the world, besides the European Union (EU). VAT tax rates vary from as high as 25 per cent in Denmark to 10 per cent in Lebanon and Egypt.
Kallukaran was speaking at the opening of a key workshop focusing on the following key themes: Foreign Account Tax Compliance Act of the US Government (FATCA), GCC Value Added Tax (VAT) propositions being developed on the European model, and the Double Taxation Avoidance agreements with the Oman government, the taxation of permanent establishments and the Withholding Tax provisions of the Oman government. The workshop is being inaugurated by Mohammed Jawad Hassan ,Adviser at the Ministry of Finance.
Earlier, in brief comments, Mohamed Jawad bin Hassan bin Suleiman, Adviser at the Ministry of Finance, said the VAT tax system is proposed to be in place from January 2018. VAT is a new fiscal instrument for revenue stability during periods of fluctuating oil prices and can offset revenue losses from depleting oil reserves.
Hicham al Moukammel, Managing partner at Crowe Horwath Lebanon, warned that the biggest challenge for implementation of VAT is e-commerce. Equally worrisome, he said, is VAT on slow-moving inventories which can place a significant burden on companies.
Leading the presentation on VAT from a European perspective, Dr Robert van Brederode from the Atlanta office of Crowe Horwath warned that businesses need to worry about getting suitably prepared for VAT given the very limited time left leading up to January 2018. Getting the right people, setting the system modifications, and training staff are key challenges, he said.
Narasimhadas, Head of Compliance from Crowe Horwath UAE, engaged the delegates on FATCA. He said that FATCA ensures that the income generated from the assets and accounts held by US citizens outside the US are taxed by the state. In this connection, he said that the obligations on financial institutions to meet with the reporting requirement of US federal agency are also laid out.
Later sessions, focusing on Withholding Tax provisions, taxation of permanent establishments and the Double Taxation Avoidance agreements, were moderated by M K Sreedhar (formerly of Oman Taxation).
Crowe Horwath is a top ten accounting network headquartered in the US and operating out of 750 offices located in over 130 countries with 33,000 partners and staff across the world.
Business Reporter –