An august 2018 article in the U.S. daily Khaleej Times, the launch date was scheduled for January 2019. This was confirmed later when the Bahraini Parliament approved the VAT agreement in January 2019. The Single Agreement on VAT (VAT) of the Cooperation Council for Gulf Arab StatesThe Cooperation Council`s single VAT agreement for gulf Arab States was published by UM AL-QURA, number 4667, H1438/7/24. This agreement aims to define the uniform legal framework for the introduction of VAT in GCC countries, which is imposed on deliveries of goods and services. The kingdom agreed by royal decree (point m/51 of 5.05.1438). The VAT agreements concluded under the GCC VAT agreement and excise duties are the basis of each country`s individual VAT and excise scheme. Each Member State adopts its own national VAT legislation, using agreed-upon principles as guidelines. The GCC VAT Convention can be defined as a single VAT agreement by the Gulf Cooperation Council (GCC) for Arab states. VaE and Saudi Arabia will be the first countries to introduce VAT to the GCC from January 2018, while other Gulf countries will have until the end of next year to implement the tax system. However, the implementation of the excise in the United Arab Emirates in the fourth quarter of 2017 is envisaged. That is why companies in the United Arab Emirates, Saudi Arabia and other Gulf countries are preparing to introduce the VAT system. The Kingdom of Saudi Arabia (KSA) has instituted VAT (VAT) effective 1 January 2018, in accordance with the framework agreement between the member states of the Gulf Cooperation Council (GCC), known as the Single VAT Agreement for the Gulf Arab Cooperation Council (the „Agreement“).
The requirements of the agreement have been transposed into the national legislation of the KSA in order to ensure the effective implementation of the VAT law. The KSA must also include in its national law areas where no order guidance has been included in the agreement or where the choice is provided for in the agreement. In March 2018, Kuwait`s National Assembly pressed a vote on the introduction of a VAT system. Reuters had previously reported that the introduction of the VAT system in Kuwait would be postponed until 2021. An April 2019 Arab Times report agreed that Kuwaiti tax authorities should introduce a VAT system in April 2021. The prospect of a 5% VAT regime in the Gulf of Oman state by early 2021 has increased. The increase in the VAT rate in Saudi Arabia came into effect the day after the end of the amnesty of the Kingdom of Covid-19 (march 18 to June 30, 2020). To access the Cooperation Council`s unique VAT agreement for Gulf Arab States, please follow this link. This uniform agreement of the VAT Cooperation Council for the Gulf Arab States must be transposed into national law in all GCC Member States, as such a KSA VAT law and draft implementing regulations have been drawn up. Bahrain introduced its new VAT system on 1 January 2019.
The Bahrain National Revenue Office (NBR) has created this website that details the country`s VAT system. Contact JCA UAE Audit for GCC VAT Agreement in Dubai, UAE, for more information, please inform us today. In this detailed guide, the authors explain the new VAT rules and their practical implications. Among the topics discussed are: The other states that have adopted VAT are: Saudi Arabia; Water-of-Life; Bahrain. Businesses are now taking into account the impact of VAT on their operations and are starting to plan the right techniques for VAT, system, finance, tax governance and compliance, training and other areas to meet VAT requirements. One of the main sources of confusion was, for example, the issue of a sales threshold.