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 Agreement provides the framework for the operation of VAT across the GCC. Each GCC member state will implement the framework through legislation and other instruments. This milestone is another reason for companies operating in the Middle East to put in place or further their VAT implementation plans.
The Unified Agreement for VAT for the GCC Region includes the following key features:
Considering the date VAT will come into effect, expected as early as January 1, 2018 in certain member states, businesses operating across the GCC need to activate their VAT implementation plans if not already substantially underway. There is a relatively short time frame in which to consider the implications of the introduction of VAT and to make the necessary changes.
Businesses shall take into consideration the VAT impact on the their transactions now and starting to plan how to have the right VAT technical, systems, financial, tax governance and compliance, training and other areas in order to comply with the VAT requirements.
Therefore, we can expect that there will be a penalty regime applicable in cases of errors made, and this is why it will be key to have the right systems and procedures in place to limit the exposure.
Tax and Legal Services Leader, PwC Middle East
Tel: +971 (0)4 304 3100
Indirect Tax Leader, PwC Middle East
Tel: +971 (0) 4 304 3744
Indirect Tax Partner, PwC United Arab Emirates
Tel: +971 (0) 4 304 3688