A unified framework agreement which appears to have been signed by each state and is expected to be made public soon sets out the underlying principles of vat laws for. The gcc vat framework agreement will be the overarching legislation, and each gcc member state will adopt its provisions into its own domestic vat law. As part of the objectives of the charter of the arab states of the gulf cooperation council gcc, a policy designed to strengthen regional cooperation, the gcc member states have agreed to sign a unified vat agreement to implement value added tax vat. Gcc vat treaty deloitte middle east indirect tax tax. And whereas this agreement aims to establish a common legal framework for the introduction of a general tax on consumption in the gcc known as vat levied on the. Each gcc member state will have its own domestic vat law and regulations formulated around the common principles of a central vat framework across the gcc. Arabic and english text of the gcc valueadded tax vat. All in the details for value added tax in the gcc the. Executive summary on jan 30, 2017, the shura council in saudi arabia announced the approval of the gulf cooperation council gcc value added tax vat framework agreement. This framework agreement sets out the underlying principles of vat laws for the six gcc countries. July 2017 six months following the vat framework agreement, signed by each of the six member states of the gulf cooperation council gcc, the united arab emirates uae government enacted and published its draft domestic vat law of 2017. Following the approval and publication of the gulf cooperation council gcc value added tax vat framework agreement, officials at the saudi arabian ministry of finance have confirmed the introduction of vat via the saudi arabia vat implementing regulations published in. Gcc countries signed vat agreement vat implementation expected in 2018 saudi arabia provided its final approval to the gulf cooperation councils gcc unified agreement to implement vat on 30 january 2017, and this was followed by an announcement by the bahrain minister of finance who confirmed bahrain signed the agreement on 1 february 2017. Value added tax vat and frequently asked questions the united arab emirates uae has recently issued its domestic vat laws, federal decreelaw no.
This milestone is another reason for companies operating in the middle east to put in place or further their vat implementation plans. This framework agreement contains the underlying principles of vat laws for the six gcc countries. This framework agreement outlines the structure of the harmonized vat re. Saudi arabia vat framework unified agreement for vat gcc published may 15, 2017 may 15, 2017 michaela merz leave a comment another milestone towards the implementation of vat across the gulf cooperation council gcc, the unified agreement for vat has been published in the official gazette of one of the gcc member states, saudi arabia. The unified gulf cooperation council value added tax. The unified vat agreement for the cooperation council for the arab states of the gulf. Value added tax july 2017 six months following the vat framework agreement, signed by each of the six member states of the gulf cooperation council gcc, the united arab emirates uae government enacted and published its draft domestic vat law of 2017. The treaty acts as the basis for the domestic vat legislation in each member state by stipulating certain principles. Gcc framework agreement for vat likely in october youtube. Gcc vat delay key challenges facing businesses in bahrain. Following the approval and publication of the gulf cooperation council gcc value added tax vat framework agreement, officials at the saudi arabian ministry of finance have confirmed the introduction of vat via the saudi arabia vat implementing regulations published in the official gazette on 29 august 2017. The arabic text of the gcc unified agreement on value added tax gcc uavat has been published in. Bahrain, kuwait, oman, qatar, saudi arabia and united arab emirates uae.
August 2017 vat what do we know now businesses in the uae and ksa know that value added tax vat. Gcc valueadded tax vat framework agreement may 2017 the kingdom of saudi arabia released the unified agreement for vat in the gulf cooperation council gcc in april 2017, setting out the principles under which the new tax system will be implemented in each of the gcc member states. A framework agreement for value added tax is expected to be finalised at the forthcoming meeting of gcc financial and economic cooperation committee in octob. The gulf cooperation council, which incorporates six arab gulf states, last week published its vat treaty, outlining the proposed january 2018 common vat regime. A unified framework agreement which appears to have been signed by each state and is expected to be made public soon sets out the underlying principles of vat laws for the six gcc countries. Accordingly, vat will become effective in saudi arabia on 1 january 2018. This document does not serve as a substitute for vat implementation regulations.
Saudi arabia vat framework unified agreement for vat. It is now understood that all six gcc countries bahrain, kuwait. Page 6 gcc value added tax country updates bahrain on 2 february 2017 the bahrain minister of finance, sheikh ahmed bin mohamed al khalifa, officially announced that bahrain had signed up to the gcc vat framework agreement kuwait the kuwait ministry of finance is in the process of preparing the local vat law which will be subject to the parliament approval. This document is a translated english version of the gcc vat framework agreement originally published in arabic. The text of the agreement has been published in the official. Saudi arabia officially published the gcc vat framework agreement in its official gazette saudi arabia ratified the gulf cooperation council gcc value added tax framework agreement by royal decree no. Gulf cooperation council vat will have significant impact on. This legal agreement has set out the framework to implement vat in each of the member states. Member states retain some flexibility, such as how to treat healthcare, education and free zones for vat purposes. The unified agreement for vat was published by kingdom of saudi arabia on 21 april 2017. Vat agreement signed by all gcc countries deloitte. M51 dated on 03051438h corresponding to 31 january 2017. The publication of the law is the first step in the establishment of the complete vat framework in the uae. Shura council approved of gulf cooperation council vat.
Implementing vat will have implications for businesses and new taxpayers, both in bahrain and abroad, directly andor indirectly. The uae vat law was signed on 23 august 2017 and the related executive regulations are expected to be issued towards the end of november 2017. Each gcc member state will implement the framework through legislation and other instruments. A brief introduction to vat unified vat agreement uvat is a framework agreement signed by all six gcc countries. Common vat agreement of the states of the gulf cooperation council. Gulf cooperation council vat may impact international. Vat overview the gcc states have worked together to develop a framework for the introduction of vat. Gcc member states agreed on a common vat framework treaty tax authorities and vat legislation in uae, the setting up of federal tax authority fta announced in november 2016 the federal national council fnc of the uae approved the tax procedures law in march 2017 each member state expected to issue national vat legislation shortly. Vat agreement signed by all gcc countries deloitte qatar. The unified agreement provides the framework for the operation of vat across the gcc. The value added tax vat framework agreement of the. The representatives of the member states of the gulf cooperation council gcc confirmed the introduction of a formal vat system across all six member states through the signing of the vat framework treaty.
In another milestone towards the implementation of vat across the gulf cooperation council, the unified agreement for vat was published in the official gazette of one of the member states, saudi arabia. Vat agreement signed by all gcc countries deloitte middle. The unified gulf cooperation council value added tax framework agreement released on 03 may 2017 disclaimer. The gulf cooperation council gcc value added tax vat treaty the treaty is a landmark document for the gulf region. Following the approval and publication of the gulf cooperation council gcc value added tax vat framework agreement, officials at the saudi arabian ministry of finance have confirmed the introduction of vat via the saudi arabia ksa draft implementing regulations published in the official gazette on 28 july 2017. Except where the zero rate applies, vat will be charged at a standard rate of 5%. The text of the agreement has been published in the official gazette um al qura by way of circular number 4667 dated 20 april 2017 2471438. The key features of the agreement are summarized below. The unified vat agreement for the cooperation council for. Executive regulations on value added tax to implement value added tax vat in the uae by 1 january 2018. Gulf cooperation council adopts draft vat framework ey.
Cooperation committee the completion of all the requirements necessary to pass the common vat agreement of the states of the gulf cooperation council and signing it. The unified agreement for value added tax vat of the cooperation council for the arab states of the gulf. This document is a bilingual replication of the unified vat agreement for the gcc but should not to be relied upon either in arabic or english version and is. The treaty is also sometimes called the framework agreement, and this is a good name it sets out the wire frame for a collaborative vat system among the gcc countries. Saudi arabia ratified the gulf cooperation council gcc value added tax vat framework agreement by royal decree no. The member states of the gulf cooperation council gcc have developed a broad framework for the introduction of value added tax vat across the gcc on 1 january 2018. This document is a bilingual replication of the unified vat agreement for the gcc but should not to be relied upon either in arabic or english version and is provided for information purposes only. The member states in the cooperation council for the arab states of the gulf. All gcc countries are working to implement vat by 1 january 2018, to. The advent of gcc vat in the gulf region is likely from 1 january 2018 and this would cause a paradigm shift in the business dynamics of this region. Common vat agreement of the states of the gulf cooperation.
Bahrain, kuwait, oman, qatar, saudi arabia and the uae. The publication of the law is the first step in the. I believe that the current lack of certainty pertaining to the ratification and release of the gcc vat framework agreement, as well as the lack of domestic legislation puts the implementation of vat at a risk of delay against the original intended date of january 2018. Following the approval and publication of the gulf cooperation council gcc value added tax vat framework agreement, officials at the saudi arabian ministry of finance have confirmed the introduction of vat via the saudi arabia ksa draft implementing regulations published in. On 20 april 2017, the gulf cooperation council gcc vat framework agreement was published in the official gazette.
Based on available information, we understand that the gcc member states have adopted a draft vat framework agreement that will form the basis of the gcc vat regime. The publication of the domestic vat laws follows the signing of the gcc vat framework agreement by each of gcc states to collectively implement vat governed by common principles agreed between the countries. Aug, 2016 a framework agreement for value added tax is expected to be finalised at the forthcoming meeting of gcc financial and economic cooperation committee in octob. The text of the framework agreement has been published only in arabic. Rcg media 2017 02 14 axis framework agreement framework agreement on the supply and pricing of medicines. The gcc uavat provides the framework for the introduction of value added tax. Saudi arabia officially published the gcc vat framework. Legal framework in line with gcc supreme council resolution made in its session no. The unified agreement for value added tax vat across. In case of a disagreement between the translation and the original version arabic, the arabic version will prevail. Gulf cooperation council vat will have significant impact.
The first two decrees implement into uae law the gcc. And whereas this agreement aims to establish a common. May 2017 in brief in another milestone towards the implementation of vat across the gulf cooperation council, the unified agreement for vat was published in the official gazette of one of the member states, saudi arabia. The unified vat agreement for the cooperation council for the arab states of the gulf was published by um alqura in its issue number 4667 dated 21 april 2017. Officials at the saudi arabian ministry of finance have indicated that the vat regime will be applicable from jan 1, 2018, and a 5% levy will apply to goods and services as. The unified agreement for value added tax vat of the cooperation. Introduction of vat in the gcc with the signing of a uni. Save my name, email, and website in this browser for the next time i comment. Common gcc framework vat will be implemented in the uae with effect from. May 2017 the kingdom of saudi arabia released the unified agreement for vat in the gulf cooperation council gcc in april 2017, setting out the principles under which the new tax system will be implemented in each of the gcc member states. Saudi arabia provided its final approval to the gulf cooperation councils gcc unified agreement to implement vat on 30 january 2017, and this was followed by an announcement by the bahrain minister of finance who confirmed bahrain signed the agreement on 1 february 2017. This document is an english version of the unified vat agreement for the cooperation council for the arab states of the gulf. Scope of levy article 2 provides that all imports, and the supply of goods and services, shall be subject to vat in accordance with the provisions of the gulf cooperation council gcc vat framework agreement, the law and. The unified agreement for value added tax vat of the.
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