The implementation of a value added tax (VAT) in the Gulf Cooperation Council (GCC) continues to move forward, despite ongoing turmoil among its member countries.
The United Arab Emirates (UAE) this week became the second GCC country to formally adopt a VAT, following the Kingdom of Saudi Arabia’s similar actions earlier this year. Like Saudi Arabia, whose VAT is slated to take effect Jan. 1, the UAE’s VAT regulations are based on the Unified VAT Agreement the GCC developed to establish common VAT principles and a framework for all seven GCC member states.
Now that final legislation has been released (draft legislation was distributed previously on Nov. 8, but recalled within a few hours), you can read about it here. The UAE also created a website where tax professionals can download information and documents related to VAT registration, importing declarations and the UAE’s excise tax.
While the UAE’s adoption of VAT was expected, a dispute that flared up between Qatar and Saudi Arabia (and other GCC countries) earlier this year raised questions about the future of the GCC’s VAT agreement. The UAE’s move suggests that the disagreement will not impede the VAT adoption in GCC countries at this point. Note that Bahrein has passed a bill to implement the GCC framework agreements (VAT and excise tax). We’ll keep you posted as both situations continue to unfold.
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