Qatar is soon expected to push forward the implementation of value added tax (VAT) in view of the recent agreement among the Gulf Co-operation Council (GCC) countries, according to Ernst & Young (EY) seminar.

Qatar has already ratified the VAT framework agreement of the GCC, and continues to set the stage to implement VAT, EY experts said at a recent virtual seminar on tax for Qatari businesses.

Due to the recent agreement among the GCC countries, plans for VAT implementation in Qatar are expected to push forward soon, and it was strongly advised that businesses in Qatar ensure proper VAT setup and compliance at the earliest – given that most companies typically need at least six months to be ready, they said.

A recent joint report of the Association of Chartered Certified Accountants and law firm Al Tamimi and Company had said Qatar’s General Tax Authority (GTA) has already put the necessary systems and processes into place to enable the introduction of VAT, but further government approval is required to proceed with VAT implementation.

It is not clear, at this stage, whether this approval will be provided during 2021. Qatar’s recent implementation of an excise tax based on the underlying principles of the GCC excise tax framework appears to suggest that Qatar may still be committed to implementing VAT in the future.

The meeting also said tax authorities in the GCC have renewed focus on opening additional revenues, with an even greater focus on tax audits and transfer pricing.

"The Covid-19 pandemic forced regional governments to concentrate on stimulating business, supporting individuals, as well as using tax and expenditure to support companies," said EY Business Tax Advisory partner Ahmed Edessouky.

The GTA was amongst the first in the region to postpone its tax returns and payments deadlines to support the private sector and the wider economy, he said.

Today, tax authorities have renewed focus on opening additional revenues, with an even greater focus on tax audits and transfer pricing, he said, adding the landscape is also being completely transformed by digitisation, and tax administration processes are already far more digital than initially expected.

These trends are also leading a greater desire by the government for more access to real time data – and there is now a larger emphasis on companies operating in a digital compliance model, as well as sharing an unprecedented volume of data directly with the government for B2G (business to government) reporting, according to him.

In its survey for the EMEIA region, EY found that 52% of tax professionals felt that they were not investing enough in data and technology to manage tax risks. The results also showed that 95% of organisations believe there will be an increase in their tax risk profile, including reputation risk.

On the domestic front, one of the key topics covered in the meet included the implementation of the new Qatar tax administration system “Dhareeba”, which went live on July 1, 2020.

While welcoming the tax authority’s efforts to implement the new system and alleviate the burdens associated therein, it was pointed out that taxpayers should remain aware of these new changes in their obligations to avoid any potential setback.

"Once fully operational, the new Dhareeba system will significantly facilitate the taxpayers’ management of their tax obligations and will ensure smoother communications with the tax administration," EY said.

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