Value Added Tax (VAT) is Coming Soon to the Gulf Cooperation Council (GCC)

Representatives of each member state of the GCC signed a VAT Framework Treaty (the VAT Framework) in October 2016, and domestic legislation has already been published by both Saudi Arabia and the United Arab Emirates. Legislation is expected to be published by the other member states in due course. The VAT Framework (and the domestic legislation already published) broadly adopts the characteristics of the VAT system in use across the European Union and can be expected to operate in a similar way.

Although the VAT Framework forms the basis for the domestic VAT legislation being rolled out in in each GCC member state, there will inevitably be variations in the way it is implemented and applied in, and applied consistently within, each jurisdiction.