Are you ready for VAT on the Gulf Cooperation Council (GCC)

What Countries are a part of the GCC and when will VAT be implemented?

The GCC member States are United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, Kuwait. The proposed implementation date of VAT across the GCC is 1st January 2018.  At least, two GCC countries must implement VAT for the GCC VAT agreement to come into effect.

Which countries have already announced the implementation of VAT?

At this point, Saudi Arabia, Bahrain and UAE have already announced the adoption of the VAT Agreement. All six GCC countries may not be ready to implement VAT from 1 January 2018.

What are the general rules of the GCC unified VAT Agreement?

A single standard VAT rate of 5%, 0% and exempt, will be adopted by all Member States.

Standard-Rated Supplies

  • The standard VAT rate will be 5% unless a zero rate or exemption applies.

Zero-Rated Supplies

  • Oil sector, petroleum derivatives, and gas.
  • Food products.
  • Medical supplies.
  • Intra-GCC and international transport.
  • The export of goods to jurisdictions outside of the GCC Member States will be subject to a zero rate of VAT.
  • VAT-Exempt Supplies


  • Health
  • Local transport
  • Real estate, it is more likely that the sale, purchase or lease of commercial property will bear VAT. Though, there will be no VAT on residential property.
  • Financial Services. However, Member States may choose to apply different VAT treatments to financial services if they wish.


Intra GCC Transactions

Supplies of goods and services from a VAT registered person in one Member State to a VAT registered person in another Member State are subject to the reverse charge mechanism.

Regional vs. Country level VAT reporting

Another major consideration impacting I.T. is at what level each GCC member state decides their tax payers should report their tax receipts. In the United Arab Emirates (UAE) for example, VAT is a Federal Tax. The invoices concerning transactions within different Emirates must disclose the place where goods and services are supplied, as the government allocates the generated VAT revenues to the respective Emirate where the supply happens.

Out of GCC Transactions

The export of goods to jurisdictions outside of the GCC Member States will be subject to a zero rate of VAT.

What is the registration threshold for the Member Countries?


What can I do in order to prepare my company for VAT on the GCC?

The announcement by the GCC of the VAT Framework Agreement confirms the implementation of VAT in the GCC Member States from 1 January 2018. Therefore, businesses operating in the GCC only have six months to prepare for the VAT implementation!

GCC businesses should initiate a VAT impact assessment immediately, to determine the impact that VAT will have across their operations and how to get their ERP system ready for VAT in the GCC.

The impact assessment should be used to develop a clear plan as to the steps that must be taken to be ready for VAT from 1 January 2018.

Who can help me prepare for VAT on the GCC?

Tytho has a team of VAT Accountants and Tax Technology specialists working together that help business partners follow the legislation and technology requirements, by ensuring their ERP systems are ready for the VAT implementation and comply with the respective GCC VAT laws.

Start planning today and have the right VAT technical, systems, financial, tax governance and compliance, training and other areas in order to comply with the VAT requirements.

Get in touch!