​ Common VAT Agreement of the States of the Gulf Cooperation Council

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); a tax on the consumption of goods and services. The tax is imposed on importation (exceptions may apply) and the transactions of goods and services at each stage of the supply chain. The tax is in line with the existing Unified Economic Agreement between GCC countries, an agreement that aims to develop economic ties to coordinate and standardize economic, financial and monetary policies. Closer integration will help to strengthen the GCC and continue working towards the establishment of a unified regional economy.

VAT is set to be implemented on 1st January 2018. The UAE is in the process of issuing tax related legislations, including VAT law, which will take effect on that date.

The unified VAT agreement will include:

1. Definitions and general provisions

2. Supplies within the Scope of the Tax

3. Place of Supply

4. Tax due date

5. Calculation of Tax

6. Exceptions

7. Exceptions on importation

8. Persons who are Obligated to Pay Tax

9. Deduction of Tax

10. Obligations

11. Special Treatments of Tax Refunds

12. Exchange of Information among member states

13. Transitional provisions

14. Objections and appeals

15. Closing provisions