Value Added Tax (VAT) and the aviation sector in the GCC

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VAT and aviation in the GCC

Impacts of VAT on the aviation industry in the Gulf

With the introduction of Value Added Tax (VAT) in the Gulf Cooperation Council (GCC) the aviation sector must develop and position a point of view on the most effective and pragmatic way to treat the aviation industry in the GCC from a VAT perspective after understanding the effects of this indirect tax. So how will VAT implementation in the GCC affect the aviation 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 aviation sector.

The summary document aims to give a greater understanding of the introduction of VAT in the GCC and how VAT will impact the aviation 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 aviation sector in the GCC?
  • What are the business issues that will arise upon the introduction of VAT in the GCC?
GCC VAT Fundamentals in the Aviation Sector