Gulf Cooperation Council VAT Agreement

• Gulf Cooperation Council countries are seeking to develop strategies aims to develop
cooperation relations between them, to achieve economic integration, develop similar
legal legislation in economic fields, and establish a unified framework for implementing
the VAT in the Gulf Cooperation Council countries. This agreement was known as Gulf
Cooperation Council (GCC) VAT Agreement

• The Unified VAT agreement mandated the application of VAT on supplies of goods and
services, and urged each GCC country to reflect the application of its unified provisions
in local systems in accordance with the mechanisms followed in each country.

• In this article, we will discuss some of the provisions of this agreement – GCC VAT
Agreement – and the reality of its application in the Gulf Cooperation Council
countries.
GCC VAT Agreement

Country Rate
Bahrain 5%
Kuwait 5%
Oman 5%
Qatar 5%
Saudi Arabia 15%
United Arab Emirates 5%
Exception from Paying Tax in Special Cases
• Each Member State has the right to exclude the following categories from paying tax or allow them to recover the tax
incurred when receiving goods and services. These categories include:

• Government agencies or institutions (identification subject to the Member State)

• Charitable organizations (according to the classification of the member state)
• Companies that are exempted under agreements or companies that host international events
• Citizens of the Member State if they build a residential house for private use
• Unregistered farmers and fishermen are taxed
• Provided that the period for keeping tax invoices, records and accounting documents shall not be less than five years from
the end of the year. A taxable person in any member state of the agreement may claim the tax paid in another member
state.
• Member states have the right to exempt some sectors or subject them to tax at a zero percent rate in accordance with the
conditions and controls they specify, but all the countries of the agreement agreed that this includes the sectors of
education, health, real estate, and local transportation.

• Each member state has the right to subject its oil, oil derivatives and gas sectors to zero tax, in accordance with its specific
conditions and controls.
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• Source: Gulf Cooperation Council VAT Agreement