VAT on Construction Industry

How will VAT affect the UAE’s construction industry

 vat on construction

VAT on Construction Industry: The construction industry plays the vital role in the UAE’s economy. As per the experts in the industry implementation of VAT is not an easy task for the construction companies, as the companies fall under pressure to get their undertakings in order in less than a year.

The construction projects are long term activities in planning and delivery. The high-esteem projects, final payments may be delayed for long periods after the work has been physically finished. This process is associated with involvement of many parties such as subcontractors, and the supply chains can be complex. These are some of the reasons for the construction sector VAT implementation can be a multifaceted and can bring errors in VAT accounting.

read more: VAT service providers in UAE

The ongoing projects could encounter with certain issues with the implementation of VAT as VAT might not have been planned from the beginning of the project and contracts will most likely be silent on VAT. In these conditions it is very important to figure out who will account for the VAT on supplies. Large construction companies have to take effort not only to implement the system to charge VAT but also to define their own status of VAT. The process of registering for the VAT will be through a complete electronic system and the UAE government has already announced that the companies can register for VAT from October 2017.

OBM provides assistance in the transition and compile paperwork and also provide training to the staff to cope with the new system. VAT may be new to GCC but OBM professionals with extensive experience in VAT provides with ultimate advice on preparation for VAT implementation, UAE and registration for the construction sector and also for other sectors.