Blog > Blog > VAT > Arab Gulf VAT live today - Avalara

Arab Gulf VAT live today

  • VAT
  • 31 December 2017 | Richard Asquith

Arab Gulf VAT live today

Saudi Arabia and the United Arab Emirates (UAE) have today become the two latest states to impose Value Added Tax on their consumers.  From midnight, 5% VAT became due on most transactions, including between companies (but with the right to reclaim).

GCC 6 states and VAT

In 2016, the six members of the Gulf Cooperation Council signed the VAT Agreement, committing them to each launch a 5% VAT regime, including a single union area with harmonised tax principles and simplifications on intra-state trade.

The current status by nation is as follows:

  • Saudi Arabia – launches today a relatively easy-to-follow regime with few exemptions. Existing taxes means businesses has at least some basic experience of taxation. The implementing law and supporting compliance guidance were made public over the summer, and have given businesses some time to prepare. Almost 100,000 businesses are now VAT registered with the GAZT.
  • UAE – implements VAT today, albeit it a narrower base than Saudi Arabia with more zero rating and exemptions around financial services, real estate and public transport. The FTA has been much slower to issue the legal and supporting documentation, with compliance regulations only appearing in December. The Federal Tax Authority has been much less proactive on educating businesses.
  • Bahrain – expected to launch its VAT regime around July 2018.
  • Oman – declared recently that it will not implement VAT until at least January 2019 despite facing further credit rating cuts with a large deficit.
  • Kuwait – 2019 is most likely the earliest implementation date with a slower moving political decision-making and parliamentary process.
  • Qatar – is vague on its implementation plans, and indicated unofficially Quarter 2, 2018. But it faces regional political uncertainty following sanctions from some GCC states and Egypt.
Latest Saudi news
Saudi Arabia VAT reverse charge foreign providers
October 5, 2018

The Saudi Arabian tax authority has published guidance on the reverse charge rules for B2B supplies provided by non-residents. As with most VAT regimes, the...
Saudi Arabia 4,700 VAT violations
April 23, 2018

Following the 1 January 2018 launch of 5% VAT in Saudi Arabia, over 4,700 violations have been found from 12,578 audits of businesses. The figures...
Four Gulf states not ready for VAT till end of 2019
February 15, 2018

The International Monetary Fund (IMF) has declared that the Arab Gulf states of Bahrain, Qatar, Oman and Kuwait will not be prepared for the launch...

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.