Dhruva Consultants VAT Compliance Services

VAT Advisory and Compliance support

Sector: Leisure, Hospitality & Real Estate

Why is it important?
The Group is one of the largest UAE based conglomerates owned by His Highness, the Ruler of Dubai. The Group is engaged in diversified sectors like real estate, hospitality, healthcare, retail, leisure & entertainment, etc.

The Company was assisted by a Big 4 Firm in implementing VAT. However, the post VAT implementation support including advisory and compliance was awarded to Dhruva Consultants. Being a prestigious Group, needless to emphasise, all the
Big 4 Firms were pursuing this assignment. This project is one of the major wins for Dhruva Consultants in the GCC region as we won the assignment with a substantial fee.

The scope of work encompassed undertaking VAT health check-up, and providing complex VAT advisory and VAT compliance support to the entire Group.

Three key aspects of our services were:
1. The project required a specialised team, having experience in similar sectors, with a dedicated team.

2. Providing advisory support to the Group within a turnaround time of 48 hours.

3. Compliance support on on-going basis while performing the health check activity (simultaneously) for resolving past errors.

The project was peculiar as the assignment for VAT health check was a time-bound exercise and the deliverables were required to be issued within a short time frame.

The VAT health check exercise involved detailed review of VAT implementation carried out by the Group and analysing the tax positions adopted. The number of entities in both the Groups put together is over 75 making the exercise quite
complex and time consuming. The team ensured a thorough review of all transactions and confirming whether the tax positions were in line with the VAT legislation.

The project was complex since the Group deals in various sectors and the VAT impact had to be analysed on multiple arrangements. The assignment required thorough understanding of the Group’s business in all the sectors for which we had
detailed discussions with Group’s finance and operating teams. As the engagement involved liaison with multiple stakeholders, different teams, etc., coordination and completing the project on time was crucial as the Company had internal management timelines within which we had to provide our report along with key issues and ways forward.

Upon careful review of the Accounts Payable reports, we were able to identify the incorrect tax positions adopted in the past which had a multiple effect. Another complex issue which we identified during the review was in relation to Input Tax Apportionment due to provision of exempt income by the Group which was tricky as the Group is a Master Developer and not a simple Real Estate entity.

Apart from the above, we also identified other significant issues which were highlighted in-depth, and detailed and precise VAT implications were provided to Client. With respect to the queries of the Group, we consistently provided detailed opinions/ comments to the Group, considering all the relevant laws within UAE, on a timely basis.

As the project is crucial and challenging, the dedicated team ensured that they put all their efforts into the assignment by being constantly in touch with the client and providing regular updates on the project. As part of the engagement, we have also been providing technical trainings to client’s team members. The team ensured they completed the assignment on time and met client’s expectations. Dhruva Consultants has received constant appreciations from the client for its dedication and hands-on knowledge of the business, as well as the practical and technical aspects of the VAT legislation.

Post-completion of the health check, the next step was to rectify the errors reported in the past. A timely action by Dhruva Consultants has resulted in mitigating the exposures and making the Group VAT compliant.