Value Added Tax In gcc countries

Value Added Tax In gcc countries in 2025

Value Added Tax In gcc countries

The Gulf Cooperation Council (GCC) is an economic and political alliance formed in 1981, bringing together six Arab states in the Persian Gulf: Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman, and Qatar. Its primary goal is to foster unity and coordinate efforts for economic, social, and cultural development among its members. One notable achievement of the GCC is the introduction of a unified taxation system, known as Value Added Tax in GCC countries. Implemented to support regional growth, this tax is applied at a rate of 5% across the member states, ensuring consistency while boosting government revenues.

 gulf vat details

Value Added Tax (VAT) is a consumption tax applied at every stage of the supply chain, from manufacturing to the final sale. It’s calculated based on the value of the goods or services purchased by the consumer. Introduced on January 1, 2018, Value Added Tax in GCC countries replaced the earlier consumption tax system, aiming to enhance government revenue and create a unified tax structure across the region. Currently, the VAT rate across GCC countries stands at 5%, ensuring consistency while supporting economic growth.

gcc countries list

The Gulf Cooperation Council (GCC) is a regional organization that unites the Arab states of the Gulf based on their geographical closeness and shared economic, social, and regulatory conditions. Established on 4 February 1981, the GCC aims to strengthen political, economic, and social cooperation to address common challenges. The first summit was held on 25 May 1981 in Abu Dhabi, UAE, and since then, annual summits have become a tradition to enhance collaboration among its member states. and the GCC countries list is as follows:

gcc countries list

  • Bahrain.
  • Kuwait.
  • Oman.
  • Qatar.
  • Saudi Arabia.
  • United Arab Emirates.

VAT Rates in the GCC Countries

The 0% VAT rate is applied to specific goods and services across the Gulf Cooperation Council (GCC) member states. These include Services exported outside the GCC region, Shipments of crude oil or natural gas, Certain real estate transactions and Key sectors such as health care and education.

VAT Rates in the GCC Countries

UAE Unites Arab Emirates

The United Arab Emirates (UAE) implemented VAT on January 1, 2018, at a rate of 5%, making it one of the lowest rates globally. VAT is applied to most goods and services, but essential sectors like basic food items, healthcare, and education enjoy exemptions or a 0% VAT rate. Entities with taxable supplies over AED 375,000 are required to register, while those with supplies exceeding AED 187,500 can register voluntarily.

Saudi Arabia

In Saudi Arabia, VAT was introduced in January 2018 at a standard rate of 5%, replacing the previous sales tax. However, as of 2023, the VAT rate has been increased to 15%, aligning with the government’s plans to enhance revenue and reduce dependency on oil. Businesses or individuals whose taxable supplies exceed SAR 375,000 within a 12-month period are required to register for VAT.

Bahrain

In Bahrain, VAT was introduced on January 1, 2019, with an initial rate of 5%. This rate was increased to 10% on January 1, 2022, to support the country’s fiscal goals. While most goods and services are taxed, certain sectors such as financial services, residential property sales, and healthcare and education remain VAT-exempt. Businesses with annual taxable supplies above BHD 37,500 must register for VAT.

Oman

In Oman, VAT was introduced on January 1, 2021, at a standard rate of 5%, with the Ministry of Finance being the responsible authority for administration and enforcement. Similar to other GCC countries, VAT is applied to most goods and services, but certain items are either taxed at a reduced rate of 3% or are exempt from VAT. Key sectors subject to VAT in Oman include telecommunications, banking and financial services, insurance, electricity and water, petroleum products, real estate, and transport. Businesses with an annual turnover exceeding OMR 38,500 must register for VAT.

Kuwait

As for Kuwait and Qatar, VAT is not expected to be implemented until at least 2024, as rising inflation and high oil revenues have helped these countries maintain strong tax revenues without the immediate need for VAT.

How can AHG help you with VAT tax registration?

If you are seeking expert guidance and support for VAT tax registration, AHG  is here to assist. Our team of experienced professionals possesses an in-depth knowledge of tax laws and regulations, offering personalized guidance tailored to your specific needs. With our help, you can navigate the complexities of VAT registration, reduce your tax liability, and avoid costly penalties. Contact us today to learn more about how we can help you set and achieve your financial goals!

Conclusion

Thus we have come to know the most important points about Value Added Tax In gcc countries, gcc countries list and the VAT Rates in the GCC Countries.

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Managing finances as an influencer in the UAE can get complicated, but AHG makes it easier. With our experience in influencer accounting, we handle everything from tax compliance to financial planning, so If you need any tax services or tax consultancy, you won’t find better than AHG Legal Accounts.  Each of our teams has extensive experience in this field and will provide you with the best services in a professional manner. Please feel free to contact us today, we are always waiting for your request to be fulfilled!

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