GCC countries signed VAT agreement has been saved
GCC countries signed VAT agreement
VAT implementation expected in 2018
Saudi Arabia provided its final approval to the Gulf Cooperation Council’s (GCC) unified agreement to implement VAT on 30 January 2017, and this was followed by an announcement by the Bahrain minister of finance who confirmed Bahrain signed the agreement on 1 February 2017. It is now understood that all six GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) have signed the agreement, paving the way for the introduction of VAT throughout the GCC in 2018. The next steps are for local implementing laws to be agreed in each country.
Businesses with operations in the GCC countries will be impacted by the introduction of VAT, which will represent a fundamental change to business operations in a region with little history of taxation. Potentially affected companies should begin preparations to ensure compliance with the VAT law by 2018 if they have not done so already.