Value Added Tax (VAT) &

Enterprise Resource Planning (ERP)

Services Proposal

Prepared by: DanOwa Group

www.danowagroup.com

www.dovat.danowagroup.com

Nov 2019

sales@danowagroup.com
A) Introduction and Background:

DanOwa Management & Accounting Consultancy (DOMAC) is a part of

DanOwa Group, a business Consultancy and Financial Advisory Firm, based
in Kingdom of Bahrain with associates in other parts of the world, with the
vision to provide quality and value-added services. DOMAC is licensed by
Ministry of Finance, Bahrain to provide Accounting & Taxation Consultancy.

Also DanOwa SofiTech (DOST), an IT solution co. Providing software solution

(100% VAT Compliant). Our prime objective to create awareness about VAT in
Bahrain and assist Bahrainis as well as Expatriates to learn about the change
which having a huge effect in the business operations.

A) Requirements

 Financial Accounting
 System Setup
 VAT Consultancy/Verification
 VAT Return Filing
 VAT Auditing

How we do it?

We are all about ease and convenience in handling Value Added Tax effective
with proven strategy, best practices, proven methodologies, qualified and
experienced personnel, and a highly responsive approach in managing
deliverable.

B) VAT registration requirement in BAH and other provisions as per BAH

VAT law:

Under the BAH law, the threshold is BHD 37,500/- for annual turnover, it’s
must to register a company with National Bureau of Revenue (NBR) before
20th Dec, 2019 as last stage to for organizations having annual revenue/sales
else may have to pay penalty of BHD 5,000/-, 10,000/- or Percentage of Sales
for non-compliance.

To be compliant with VAT requirements, all businesses will need to make

adjustments to their:

 Record keeping
 Accounting systems
 Financial reporting

In addition to the above related to Finance/Control:

 Human Resources
 Operations
 Procurement

sales@danowagroup.com
Also need to be assess and address the requirements to make adjustments in
the contracts and other business documents including invoices etc.

C) VAT Compliance requirement:

sales@danowagroup.com
D) Impact of VAT on business and IT challenges:

E) Our Services:

Our tax experts provide tax strategies tailored to each client’s unique needs.
We provide tax consulting services to implement tax planning to minimize the
impact of tax liabilities. Our services includes:

 Tax Computation
 Tax Filing
 Tax Advisory
 Tax Planning
 Representations before the Tax Authorities
 VAT ERP

We can also provide experts in the following areas:

 Internal Audit
 Compliance
 Risk Management
 Business Plans and Feasibility Study
 Accounting Advisory
 IFRS Conversion
 Financial Advisory (Feasibility Reports, Financial Projections)
 CFO Services (www.dovcfo.danowagroup.com)

sales@danowagroup.com
Some of the services we can provide to the companies in BAH, UAE &
KSA:

A) VAT Advisory:

We can provide the advisory services covering following areas:

1) VAT Readiness Assessment:

In the event that a full due diligence is not a current priority and a simple
exercise is preferred in order to ascertain which elements of your business will
attract VAT responsibilities, we can conduct a “readiness assessment” and
give you a comprehensive report on the identified aspects of your business
that will require attention.

2) VAT Due Diligence:

With tax, accounting and legal expertise, amongst a host of other

competencies to call on, we can conduct the appropriate due diligence on your
business enterprise, no matter the size or complexity, to analyze the impact
that VAT will have on your systems, procedures, policies, staff competence,
supplier compliance and even your corporate structure, and report the risks
that each element of your business will be exposed to and recommend
corrective measures. This will enable management to make the best decisions
to ensure successful implementation for a sustainable solution and also to
mitigate the overall impact on VAT on your business and its success.

3) System Assessment:

We can conduct assessments on your ERP systems and other accounting

systems to determine configuration changes required and adaptation to cater
for VAT.

4) Project Management:

We can manage your VAT implementation project from start to finish.

5) VAT Registration:

With the expected rush for registration and usual processing and
administrative issues, we can provide the necessary support to facilitate the
entire registration process and make it as simple as possible.

6) VAT Training:

From sales persons and creditor clerks to accountants and senior

management, training on the implementation and day to day administration of
VAT will be imperative to ensure the VAT does not become a cost the
business. We have appropriate training modules to suit each staff grouping

sales@danowagroup.com
and departmental category to ensure that training courses provide the relevant
detail at the relevant level.

7) VAT Returns:

At the stressful times for the responsible employees, particularly in a new VAT
environment where many employees have limited experience, we can assist
with the completion of periodic returns and ensuring timely and accurate filing
of VAT calculations and attending to any queries raised by the relevant
authorities.

8) VAT Manuals, Policies and Procedures:

We has the expertise to generate customized VAT manuals, policies and

procedures to cater for your particular business to ensure strict compliance
with the requirements of VAT compliance and also to avoid penalties and
interest that may be incurred in the case of any non-compliance by the
business and employees.

9) Dispute Resolution:

In our experience disputes arise from time to time in the normal course of
business, and so will disputes arise with regard to VAT. Such disputes will be
particularly prevalent during the initial stages of implementation, with VAT
being a new concept in the GCC. Managing disputes is a time consuming task
for which existing staff may not necessarily be equipped for or have the time to
deal with. We are capable of alleviating the problem by providing a platform to
whom to delegate these incidents and provide cost effective solutions.

10) VAT Audits:

A regular VAT audit is always a good idea, particularly in the early years to
ensure proper compliance and correct implementation and accounting. The
team can provide independent assessments periodically or on an ongoing
basis to prevent possible non-compliance and even the identification of any
under claiming of VAT input credits.

11) VAT Rulings:

Legislation does not always cover each and every imaginable situation that
may arise and sometimes there are grey areas that need clarification. This
may arise in respect of out of the ordinary transactions for which it may not be
clear as to what the VAT impact will be on the business. We can apply for
clarification and obtain VAT rulings from the relevant authorities relevant to
your particular situation.

12) Tax Clearance Certificates:

We can assist in obtaining the necessary clearance certificates that will be

required for certain legal and regulatory processes.

sales@danowagroup.com
F) Our Methodology:

G) VAT ERP:

ERP is integral part of VAT implementation and filling returns, if you either
already have a system, however does not comply with the requirements from
NBR, this will result into penalties and loss of reputation for the businesses.

DanOwa is one of the companies in Bahrain having vision prior to VAT in GCC,
working to educate organizations about the importance of having a proper
system to increase the proficiency and profitability of the business.

We are providing solutions to the companies which are highly recommended

and tested in various industries from manufacturing to trading, service oriented
etc.

Here are some of the functions:

Features:
* General ledger
* Cash management
* Bank reconciliation
* Expense claims
* Accounts receivable
* Accounts payable
* Estimates & quotes
* Purchase orders
* Billing & invoicing
* Credit notes
* Delivery notes
* Sales orders
* Stock & inventory
* Time & service billing

sales@danowagroup.com
* Billable expenses
* Fixed asset management
* Human Resource and Payroll
* Capital accounts
* Profit & loss statement
* Balance sheet
* Statement of changes in equity
* Trial balance
* Multi-currency
* Custom fields
* Customizable invoices
* Chart of accounts
* Journal entries
* Aged receivables
* Aged payables
* Customer statements
* Remittance advices
* Comparative reporting
* Project-based accounting
* Import bank statements
* Recurring billing
* Cash-basis accounting
* Accrual-basis accounting
* Departmental accounting
* Manufacturing management
* Email templates
* Drill down reports
* Budgeting
* VAT Accounting
* Multi-language and company etc

H) Our Remuneration

Successful relationships link value received to fees paid. Our philosophy on

fees is that it should be mutually rewarding. You need to be assured of value
for money and we should be able to earn a reasonable return for our efforts.

We are confident that you will find our fee commitment to be a fair
demonstration of our sincere desire and determination to serve you. Our fees
are charged on the basis of time spent, expenses incurred and value delivered,
having regard to the degree of responsibility and skill involved. We are
conscious of the needs of management to consider the cost and benefit
relationships in their dealings with professionals.

sales@danowagroup.com
Our proposed fee for the assignment, based on our estimate of the time and
efforts involved, will be structured as follows :

We estimate our fees to be:

 Implementation of new ERP as per Accounting Standards/IFRS and VAT

regulations BHD 680/- (1 time) users access and training
 Implementation of VAT BHD 400/- (1 time)
 Registration for VAT BHD 100/- (1 time) MUST be done before 20th Dec,
2019 to avoid BHD 10,000/- penalties.
 Accounting Services, if any - BHD 180/- (per month) - depends upon
volume of transactions.
 VAT Audit & Return Filing - BHD 250/- (Quarterly)

Total Initial Investment BHD 340/-

Out of pocket expenses, if any will be billed separately (likely to be minimal),

our other services cost as follows:

H) Payment Terms & Delivery Time:

50% advance on signing of the proposal balance upon final delivery. The
delivery of the project is 10-15 days from the 1st payment.

I) Acknowledgment

Please note that the proposal is subject to our ‘Terms and Conditions’ of
business, as set forth in Engagement Letter provided on acceptance of
proposal. We shall be obliged if you will kindly sign and return a copy of this
Proposal as your agreement to the terms set out. Should you require any
further information or clarification, please do not hesitate to contact us.

This proposal is valid till 2 weeks from the date of its submission.

Signed on Behalf of

by:

Name:__________________________________

Designation:__________________________________
Thank you for your business.
Dated:________________

sales@danowagroup.com