Value Added Tax is an indirect tax, which is imposed on consumption, not profits. VAT is a vehicle that nations use to raise the public revenues in order to ensure continually providing quality governmental services and assist with realizing their economic vision and future development plans.
VAT is applied in more than 150 countries worldwide. It is assessed in each phase across the supply chain. In general, the final consumer will bear the cost of VAT while businesses calculate and collect the tax and then pay the same to the government.
In the course of continuing efforts of economic and financial reforms adopted by the State of Kuwait in particular and GCC countries in general to diversify the sources of income and minimize reliance on oil revenues, it is most likely that GCC countries will issue a unified VAT law. During the meetings of GCC Ministers of Finance, it has been agreed to develop the final arrangements for VAT implementation mechanism, which is expected to be introduced from 1 January 2018.
Companies subject to Value added Tax (VAT):
Only companies that meet the minimum annual turnover requirement will have to register for VAT purposes.
Added value to business entities from Value added Tax (VAT) services
- Ensure compliance with the applicable legislative and regulatory requirements in the State of Kuwait;
- Mitigate risks of exposure to financial penalties and sanctions, thus saving relevant expenses and costs; and
- Enhance business entity’s reputation and motivate business growth.
Services provided by Baker Tilly
- Provide companies with awareness about VAT nature and its impacts on their business activities, operations, accounting systems and processes, and IT systems; and
- Assist companies with preparing for the introduction of VAT.