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VAT and financial services in the GCC
Impacts of VAT on financial institutions in the Gulf
The financial services are generally associated with a range of Value Added Tax (VAT)-related challenges under both traditional and more modern VAT systems. So how will VAT implementation in the Gulf Cooperation Council (GCC) affect the financial sector?
The release of the Treaty is a landmark event for the region and marks the true beginning of VAT implementation across the GCC. The Treaty establishes the common principles of the VAT system which is to apply in each GCC State and provides a structure on which domestic VAT legislation will be developed. The publication of the Treaty means we have clarity over the principles which every State will be required to enact and can confirm our understanding of how VAT in the GCC will impact the financial sector.
The summary document aims to give a greater understanding of the introduction of VAT in GCC and how VAT will impact the financial sector and what are the associated challenges for institutions, borrowers, savers and policyholders as per the below:
- Basic concepts of the GCC VAT Treaty
- What will be the VAT liability for supplies in the financial sector in the GCC?
- What are the business issues that will arise upon the introduction of VAT in the GCC?
- Commercial opportunities for banks in the GCC