The Gulf Cooperation Council (GCC) implemented a Value Added Tax (VAT) system in 2018.
Businesses in the United Arab Emirates, Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, State of Qatar and State of Kuwait will therefore have to charge 5% VAT on all eligible business transactions. This will affect your business if you are established in one of these countries, or trade with partners in one of these regions.
VAT is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. It is not a cost to the producer or the distribution chain members, and whereas its full brunt is borne by the end consumer, it avoids the double taxation (tax on tax) of a direct sales tax. More than 150 countries have implemented VAT (or its equivalent, Goods & Services Tax), including all 28 European Union (EU) members, Canada, New Zealand, Australia, Singapore and Malaysia.
Relevant business activities affected include:
- Manufacturing, distribution or sale of goods
- Financial services in the banking or investment fund sector
- Construction, sale or letting of real estate
- Supply of telecommunications or IT services
- Supply of goods or services in the healthcare sector
- Transportation of goods
- E-commerce sales via local fulfilment
Find out how it will impact your business in the GCC hereRead more about which sectors are subject to VAT here
There will be several issues to consider if your company has any form of business activity or regular travel in the region.
VATGlobal is a global leader in outsourced international VAT and tax solutions. Our mission is to utilise our industry-leading technology to ensure complete compliance, wherever our clients are doing business.
Our global network and extensive operational resources enable us to serve over 8,000 clients in 100 countries worldwide. These range from small and medium-sized enterprises to large multinational corporations, across a wide range of sectors.
Together we are responsible for managing multi-jurisdictional VAT and GST registrations, compliance and reporting, with expertise and experience on tax matters in over 50 jurisdictions around the world.
There are 4 areas where we can offer support as your GCC VAT partner:
- Impact Assessment
- Identify relevant transactions and VAT treatment thereof
- Review business model and advise on impact in all areas
- Provide VAT awareness training and implementation planning
- System configuration and transaction testing
- User training
- Production of VAT manuals and procedures
- Guidance on invoice requirements and processes
- Preparation and submission of VAT returns
- Audit management and consulting
- VAT recovery
- Invoicing and other compliance
- Preparation and filing of VAT returns
- ERP system configuration
- Technical VAT training from simple to advanced level
Read more about our full VAT service offering for GCC countries here.
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