Is your HR and Payroll Solution VAT Compliant?
With VAT implementation in U. A. E and Saudi Arabia and other countries round the corner, we take a look at whats needed in your HR and Payroll processes to make it VAT compliant or VAT friendly if not compliant.
Lets take a look at the components which may need VAT treatment
- Any disbursements not part of payroll like expense claims.
- Any allowances which are paid at actuals like transport charges, telephone bills, travel allowances
Mainly the payments which are done by employees and later disbursed by the organization to the employee as part of the payroll process will need to treated in a compliant way. Lets take a look at how this can be achieved.
- Any payments done should be recorded with the actual expense and VAT separately.
- The biller or the receiver of the payment should have a clear invoice, which should have the VAT registration number on the invoice while charging VAT.
You can always claim input tax credits of VAT paid as per the prevailing regulation and the industry you operate on, however to ease the administrative burden, you need to have proper compliance and documents in place, where you can calculate all the values and be VAT compliant.
We can assure you, you will have one less thing to worry about if you use HR Chronicle to manage your payroll and related VAT compliance.