The clock is ticking toward the introduction of the GCC Value- Added Tax (VAT) on 1 January 2018

Adoption of a VAT by the GCC States comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates represents a major shift in tax policy. Theimplementation of a VAT has an impact on all the segments of the GCC economies and entails a fundamental change in the way consumption taxes are enforced.

GCC States are considered as a single economic zone and the GCC VAT regime will encompass many of the features of the EU VAT regime

Broad nexus rules, which may require registration for VAT without significant business presence

Exemptions may be based on the status of the customer and not solely on the type of the transaction

Limited scope of exemptions, including Government services for education, health and social services

A single standard VAT rate of 5 %, 0% and exempt

The reverse charge applies on certain goods and services received from other GCC States. Confirms that the same VAT consequences as if the recipient obtained those services from a local supplier

Mandatory and elective VAT registration thresholds.

VAT Group Registration — aggregation and disaggregation legislation proposed


  • December 2015: GCC Finance ministers confirmed that the provisions of the GCC VAT Framework Agreement have been broadly agreed
  • January 2016: UAE Minister of State for Financial Affairs and Saudi Arabia Minister of Finance confirmed that VAT will be implemented in the GCC States in 2018 and the UAE will go live on 1 January 2018
  • April 2016: Finance Ministers in the GCC working on implementation initiatives to achieve VAT go-live on 1 January 2018
  • VAT law has been released by the UAE government to go live on 1 January 2018
  • VAT registration starts from 12th October 2017 to fully comply with the requirements with effective from 1 January 2018