VAT and oil and gas in the GCC
Impacts of VAT on the oil and gas industry in the Gulf
The Gulf Cooperation Council (GCC) region is widely recognized for its oil and gas sector as it holds one of the major crude oil reserves in the world and is the largest producer and exporter of crude petroleum. The oil and gas industry plays an eminent role in the GCC accounting for a large chunk of the governments’ revenues. So how will Value Added Tax (VAT) implementation in the GCC affect the oil and gas 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 oil and gas sector.
The summary document aims to give a greater understanding of the introduction of VAT in the GCC and how VAT will impact the oil and gas sector and what are the associated challenges for businesses as per the below:
- Basic concepts of the GCC VAT Treaty
- What will be the VAT liability for supplies in the oil and gas sector in the GCC?
- What are the business issues that will arise upon the introduction of VAT in the GCC?