Gulf Cooperation Council Tax Topics

A new VAT framework was introduced in the Gulf Cooperation Council (GCC) Member States from 2018, with the United Arab Emirates (UAE) and Saudi Arabia as the first countries to roll out VAT from 1 January 2018. Other Gulf countries have until the end of next year to implement the new tax system.

Definition of Terms

• Zero-Rated – Across the GCC, some supplies are zero-rated. Examples of these supplies are medicine, medical equipment, goods and passenger transportation, healthcare and education services, etc.

• Out of Scope of VAT – Some supplies are considered out of scope of VAT for the UAE. The most common are sales outside of the country, or supplies made from a non-registered entity. Others include certain government activities or supplies with no economic benefit. This includes providing goods or services to a different department in your own business.

• Reverse Charge – Reverse charging of VAT is required when you receive an item with no tax applied, but VAT is due at the same time. For example, if a UAE business gets services from the UK, no VAT shows on the invoice since it's out of scope. It might seem cheaper to buy the service from overseas, but the reverse charge applies. You need to pay VAT at the domestic rate. This means there's no financial advantage to buying services from overseas versus domestically.

For more information, read the following GCC tax topics:

• Setting Tax Preferences for GCC States

• Tax Code Provisioning for GCC States

• Entity Records for GCC States

• Set Auto-Generated Numbers for GCC States

• Setting Up Tax Periods for GCC States

• Applying VAT to Discount Items for GCC States

• Taxation Features Provided by SuiteApps from NetSuite

  • International Tax Reports

  • VAT Reporting

• Paying Tax Liabilities for GCC States

For more information about the International Tax Reports SuiteApp, see International Tax Reports.

General Notices