Fatima Al Qubaisi

Hello everyone, We are pleased to share with you our latest thought leadership material titled " Financial instruments: Financial reporting implication of modification of terms and contractual cashflows " In this article, we discuss the modification of financial instruments and the accounting implications as required by IFRS 9. We also provide practical steps and considerations for reporting entities when accounting for the modification of financial instruments. Please enjoy the read.

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Recoverability of Input Tax in the UAE: An Accounts Payable Perspective As Accounts Payable (AP) professionals, one of our core responsibilities is ensuring compliance with VAT regulations while managing supplier payments efficiently. In the UAE, the rules around input tax recoverability are especially important, as they directly affect both cash flow and tax compliance. Understanding Input Tax Recoverability Under the UAE VAT Law (Federal Decree-Law No. 8 of 2017), VAT paid on purchases (input tax) can be recovered if certain conditions are met: 1. VAT Registration – Only VAT-registered businesses can recover input tax. 2. Taxable Purpose – The goods or services must be used for taxable supplies (standard-rated or zero-rated). 3. Proper Documentation – A valid tax invoice must be received and retained. 4. Payment Obligation – The business must intend to pay the supplier within six months of the agreed payment date. For AP teams, this means every invoice isn’t just a payment request—it’s a compliance checkpoint. The AP Function’s Role From an AP perspective, input tax recoverability is more than a back-end tax matter. It directly impacts: Cash Flow Management: Delayed or unrecoverable VAT claims tie up working capital unnecessarily. Compliance & Risk: Failure to meet recovery conditions can result in penalties and audits by the Federal Tax Authority (FTA). Efficiency & Accuracy: Proper invoice validation and timely recording ensure VAT is reclaimed in the correct tax period. Common AP Challenges 1. Missing or Incorrect Tax Invoices Without a valid VAT invoice, recovery is disallowed. AP teams must rigorously validate supplier invoices before posting. 2. Delayed Payments If suppliers are not paid within six months of the due date, input VAT must be reversed in the following period. This creates unnecessary complexity and rework. 3. Mixed-Use Purchases Where expenses relate to both taxable and exempt supplies, AP must coordinate with finance to apply correct apportionment methods. Best Practices for AP Teams Implement Invoice Validation Controls – Ensure every supplier invoice contains all mandatory VAT fields. Align with Treasury/Finance – Monitor supplier payment cycles closely to avoid reversals due to delayed settlements. Track Partially Exempt Inputs – Work with finance to apply the new apportionment rules accurately. Leverage Automation – RPA and ERP tools can help flag non-compliant invoices and streamline VAT reporting. Stay Updated – Regular training and awareness sessions keep the AP team aligned with changing VAT laws. For AP leaders, input tax recoverability isn’t just a compliance issue—it’s a financial opportunity. By embedding VAT compliance into daily invoice processing, AP can protect working capital, reduce audit risks, and add measurable value to the organization.

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#SITE_SA has renewed its #SOC2 Type II compliance for 2025 under American Institute of Certified Public Accountants (AICPA) standards, reaffirming its leadership in Managed Detection and Response (MDR) across the Middle East. This achievement reflects SITE’s application of the highest standards of security and transparency in data protection.

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Tax amnesty and voluntary disclosure initiatives are more than short-term relief; they are strategic tools that promote compliance, safeguard liquidity, and strengthen trust between taxpayers and regulators. In Saudi Arabia, the Zakat, Tax, and Customs Authority (ZATCA) has extended its Penalty Exemptions Program until December 31, 2025, offering businesses a vital opportunity to regularise their tax status, preserve cash flow, and reduce future risks. For KSA businesses, acting now means building financial stability and positioning for sustainable growth in line with Vision 2030. Read our full article, authored by Mohammad Huwitat, on how global and local tax amnesty initiatives can support compliance and resilience: https://lnkd.in/dMYG9BRR #SaudiArabia #KSA #GrantThorntonKSAInsights #TaxAmnesty #FinancialStability

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١ تعليق واحد

Our ‘Insights into IFRS 15’ series explores the five-step revenue recognition model, offering clarity on scope, performance obligations, and application in practice. Discover how IFRS 15 ensures consistent and reliable revenue reporting across industries. Get in Touch with our Experts: Yaser Abbas Salman ✉️ [email protected] Ali Abbas Salman ✉️ [email protected] #IFRS #FinancialReporting #GrantThorntonBahrain Jassim Abdulaal Jatin Karia Sunil Thakkar Anandha Ramakrishnan Singaravelu Nishith Saxena Shashank Arya D Chandrasekhar Chris Noguera, CPA (Phl), CPA (Aust.)

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