Saudi Arabia To Be The First GCC Country to Implement VAT In 2018

Saudi Arabia has issued draft implementing legislation and implementing regulations in preparation of the 1 January 2018 launch of Value Added Tax, VATlive informes. It is based on the Gulf Co-Operation Council (GCC) VAT Treaty, which provides broad guidance on the VAT regime to be introduced in 2018 in all 6 GCC states.

The Regulations

The standard VAT rate will be 5%, with a nil VAT rate for some goods. Resident and non-resident businesses performing taxable supplies must register with the tax authorities within 20 days of passing the VAT registration threshold. The registration threshold will be SAR375,000. The regulations cover:

  • VAT registrations
  • VAT returns
  • Allowable deductions
  • VAT rates, including zero rated and exempt supplies
  • Tax point
  • Place of supply
  • VAT invoices
  • Record keeping

GCC Firms Remain Unprepared 

Earlier this month, new poll revealed that 49% of GCC-based businesses say they are yet to commence their VAT impact assessment. The poll from the Association of Chartered Certified Accountants (ACCA) and Thomson Reuters has found that there is a "significant lack of preparation and awareness".

2 Out of 6 GCC States to Meet Deadline

Out of 6 GCC states that consist of Saudi Arabia, the UAE, Qatar, Bahrain, Oman and Kuwait, only Saudi and the UAE are excepted to meet the January 1, 2018 deadline to implement a new value-added tax. "I think it is likely that those two countries will implement VAT on the first of January of next year,” Nick Maclean, the managing director of the CBRE consultancy firm in the Middle East said.

Sources: VATlive, Arabian Business, Zawya
 

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