The member states of the Gulf Cooperation Council (GCC) Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE) aim to have a local VAT-system in place in 2018. While Saudi Arabia and UAE apply their VAT legislation as per 1 January 2018, other Gulf states will introduce their VAT system later. The new VAT system will have implications for companies in and outside the Gulf states. Companies should prepare in time to avoid severe penalties, making internal processes and systems ready, and optimize their VAT position and cash flows.

VAT Framework Agreement

The VAT Framework Agreement requires the Gulf states to mandatory implement local legislation whilst allowing discretion on the VAT treatment of certain supplies. The six Gulf states reached agreement on certain common standards such as the scope of the tax, general principles and definitions, and the standard tax rate of 5% for goods and services not exempt or zero-rated.

A Brief General Idea

Going Forward

To avoid severe penalties or even business disruptions, it is important to prepare an impact analysis for these new VAT regulations. To provide you practical recommendations we need information such as:

In close cooperation with local partners, Fisconti can assist you with this impact analysis and further implementation. For more information please contact Guido van Asperen (+31 70 365 66 17 or