The Gulf Cooperation Council introduce Value Added TaxDoing business Tax
The Gulf Cooperation Council decides to introduce Value Added Tax within its member states.
Value Added Tax (VAT), which is a consumption tax on goods and services, is added at each stage of the supply chain, from production to the point of sale. It is very common but not used everywhere in the world.
In June 2016, the six member states of the Gulf Cooperation Council (GCC) signed the Common VAT Agreement, where it was agreed that each GCC Member State would introduce a VAT system at a rate of 5%.
In January 2018, Saudi Arabia and the United Arab Emirates introduced the VAT system. In 2019, Bahrain will become the third member state of the GCC to introduce it. Oman, Qatar and Kuwait are also expected to do so during 2019.
Some fields will be exempt from this taxation: healthcare, social services and education. This decision will impact enormously the societies, to the point that the GCC states need to adapt their global business strategies and their accounting practices to include the VAT rules.
I think that in general it is rather a positive thing, because it will bring some money to education
Ibrahim Abu Yousef, CEO and founder of Experience Provider M.E. Limited
Our member in Jordan, Experience Provider M.E. Limited, knows a lot about this new law. Actually, the CEO and founder Ibrahim Abu Yousef is skilled in tax and specialised in VAT.
We spoke with Ibrahim to benefit from his analysis about this new measure: read the interview here.
To find our more about VAT in the GCC, or for more information about international tax issues