The Unified Agreement for Value Added Tax (VAT) of the Cooperation Council for the Arab States of the Gulf was published by UM AL-QURA in its issue number 4667 dated 21 April 2017. This agreement is to set forth the unified legal framework to introduce VAT in the GCC states which will be imposed on the supply of goods & services and which has been ratified by the Kingdom of Saudi Arabia cabinet (decision number 257 dated 30 January 2017) and issued by royal decree ( number m/51 dated 31 January 2017).
The Unified Agreement for VAT for the GCC Region includes the following key features:
Considering the date VAT will come into effect, as early as January 1, 2018 in certain countries, 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.
Indirect Tax Leader, PwC Middle East
Tel: +971 (0) 4 304 3744
Zakat and Tax Leader- KSA & Egypt, PwC Middle East
Tel: +966 (12) 610 4400
Indirect Tax Partner, PwC Middle East
Tel: +973 1711 8886
Tax and Legal Services Leader, PwC Middle East
Tel: +971 (0)4 304 3100
Tax Partner, PwC Middle East
Tel: +966 1 465 4240
Chadi Abou Chakra
Partner, Indirect Tax and Fiscal Policy, PwC Middle East
Tel: +966 11 211 0400 Ext: 1858