VAT introduction will transform the way trading companies across the GCC conclude business transactions. New VAT requirements bring about the necessity to re-configure your enterprise software. With few months still left till the VAT go-live date, now is the right time for companies across the GCC to evaluate technological capabilities of existing IT solutions and implement new enterprise software to get ready for VAT implementation.
VAT registered businesses in the GCC will have to comply with requirements, such as charging VAT on supplies, calculating VAT deductible or granting access to VAT documents during audits. These new obligations are the perfect case for e-invoicing and e-archiving solutions.
When it comes to the e-invoicing technology, it is important for GCC companies to look for e-invoice providers delivering various e-invoicing technologies legally compliant with the new VAT regulations and the binding law, for example Federal Law No. (1) of 2006 On Electronic Commerce and Transactions in the UAE.
These days, the most widespread technological solutions include:
- EDI Invoice (Electronic Data Interchange),
- PKI Invoice (Public Key Infrastructure).
The selection of e-invoicing technology is conditioned by the volume of invoices handled by a given trading company. EDI invoicing is the best bet for companies with a large volume of invoices (both issuers and recipients), while PKI invoicing is suitable for companies with a big total number of invoice recipients but rather small volume of invoices per a single recipient.
Software integration is another important issue. System integration with accounting solutions or ERP is essential in order to achieve 100% automation, when no manual workload is required. By establishing cooperation with an IT provider who can deliver built-in integration engines, invoices are captured from and delivered to the financial system in the fully automated manner.
So as to enhance the data accuracy, it is recommended to opt for solutions with a multi-level validation engine, where all electronic invoices are validated in terms of: size, e-signature, master data, content, EAN code among others.
Certain lead time is needed to technologically prepare for VAT introduction, yet properly planned and conducted VAT implementation will result in full VAT compliance as well as business process automation achieved, owing to enterprise solutions such as e-invoicing suite or e-archive suite.