A broad-based VAT system is being implemented across all six Gulf Cooperation Council states, with a common standard rate of 5%. The United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) will introduce VAT on 1 January 2018, with the rest of the GCC countries to follow thereafter. The introduction of VAT is a significant development in the region, and many businesses are still putting in place the mechanisms required to be ‘VAT-ready’. The legislative framework is designed to be simple and is based on a GCC Treaty agreeing common principles between all states, but allowing for domestic legislation to introduce rules specific to each member state in certain areas.
