• Do I need to collect additional tax for gift cards, packages, and memberships sold before VAT was implemented?
    Yes. If you have collected full or partial payment for gift cards, packages, and memberships before VAT was implemented, you must still collect tax on any redemption or payment made after 31st December.
  • Do I need to collect VAT for future appointments where no payments were added?
    Yes. You must collect tax on any redemption or payment made after 31st December.
    For appointments that were booked before VAT was implemented and not paid for, when the guest walks in for the appointment, we recommend that you cancel the appointment and rebook the same to ensure that VAT is collected.
  • Will my employee commissions take a hit due to VAT?
    No. Employee commissions will not reduce due to VAT. This is because commissions are based on revenue, and revenue does not include VAT.

  • Due to VAT, will there be an effect on refunds?
    No. If a guest asks for a refund, you can refund the entire amount that the guest paid.
    Learn more about refunds.
  • Will VAT be applicable on partially paid invoices (partial payments collected before VAT was implemented)?
    Redemptions or payments made prior to 31st December do not attract VAT.
    You must collect tax on any redemptions or payments made after 31st December even if the payment was collected before VAT was implemented.

    Zenoti Recommendation:

    Services:
    If a guest paid a partial amount for a service that is scheduled to be done after VAT implementation, we recommend that you convert the payment to a prepaid card and ask the guest to redeem it when availing the service.

    Packages:
     Redemptions made prior to 31st December do not attract VAT.
    You must collect tax on any redemptions made after 31st December. To avoid taxation issues after VAT implementation, we recommend that you close the current packages and create custom packages to collect the remaining amount.

    Memberships:
    The following are our recommendations for memberships:

    - Discount only memberships: On the sale of memberships before VAT that offer  
       only discounts, you do not need to collect VAT.
    - Service memberships with partial payments: Service redemptions prior to 31st
      December against already paid amount do not attract VAT.  You must collect
      VAT for any payments or redemptions made after 31st December. To avoid
      taxation issues after VAT implementation, we recommend that you close the
      current memberships and issue prepaid cards to your guests.
    - Service memberships with full payments: If you have collected full payment for     a membership before VAT was implemented, you do not need to collect VAT
      for redemptions prior to 31st December. You must collect VAT for any
      redemptions made after 31st December. To avoid taxation issues after VAT
      implementation, we recommend that you close the current memberships and
      issue prepaid cards to your guests.

  • What happens to the loyalty points that my guests accumulated before VAT?

    Loyalty points on pre-tax
    If you award and redeem loyalty points on the pre-tax amount after VAT is implemented, guests can use the accrued points (that were accrued before VAT was implemented or newly accrued) to pay for services or products and not the VAT amount.
    Example: The cost of hair serum is $105, where the item price is $100 and the VAT is $5. If a guest has $200 worth of loyalty points, the guest can only redeem $100 worth of loyalty points on the hair serum. The guest has to pay the $5 VAT using other payment methods (cash/card/check).

    Loyalty points on post-tax
    If you award and redeem loyalty points on the post-tax amount after VAT is implemented, guests can use the accrued points to pay for services or products and also the associated VAT amount.  
    Example: The cost of hair serum is $105, where the item price is $100 and the VAT is $5. If a guest has $200 worth of loyalty points, the guest can redeem $105 worth of loyalty points on the hair serum.
  • What about my open purchase or transfer orders?
    If your purchase or transfer orders are not in delivered status before VAT comes into effect, we recommend that you delete the purchase orders and create them afresh.  
  • What about purchase returns to vendors?
    There is no change in how you return purchases to vendors. You can return purchases to vendors as you have been doing so far.
  • What happens if I delete any invoices after VAT?
    If you have deleted any invoice after you have submitted your VAT returns, you must report the deleted invoice details. Talk to your tax consultant to know how to do this.
    No action is required if you have deleted invoices before submitting returns.
    Note: You can use the Appointments - Deleted report to find the deleted invoices.

  • Can Zenoti help us update the tax rates and other VAT related settings?
    Yes. Zenoti can help you update the tax rates and other VAT settings for a fee.
    For more information, reach out to VatHelp@zenoti.com.

See Also

VAT in GCC: Be Ready Using Zenoti

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