Dear Clients,
Officials from the member states of the Gulf Cooperation Council, (GCC) have concluded a
Draft agreement on implementing a GCC wide value-added tax.
The agreement was reached at the 100th meeting of the GCC Financial and Economic
Cooperation Committee ( FECC) in Doha.
Kuwaiti Finance Minister Anas Al-Saleh, was quoted by the Kuwait News Agency (KUNA)
As saying that the draft agreement provides that each GCC state will be allowed to introduce
Their own VAT regimes, providing that common principals are adopted by all GCC members
Bahrain, Kuwait, Oman,Qatar,Saudia Arabia, and the United Arab Emirates (UAE).
Countries in the gulf are currently seeking ways to diversify their revenue sources to offset
Failing revenues from low oil prices, as recommended by the International Monetary Fund.
(IMF).
Earlier this month the IMF released a report reviewing the VAT regimes adopted by countries
In the Middle East and North Africa (MENA) region. The report noted that standard VAT rates
Have increased in all MENA countries, as have the number of rates levied (Except in Algeria)
As of 2013, the most recent year covered by the study, VAT rates in MENA countries ranged
From 5 percent to 20 percent. It said the recent decline in oil prices and revenues is a reminder
That even resource-rich GCC countries need to lay the basis of a tax system for the future.
A pan-GCC VAT has been discussed for more than a decade, but negotiations have stalled in
Recent years, It is anticipated that a GCC VAT would feature either a three or five percent
Headline rate.
Should you require any further clarification, please do not hesitate to contact us at:
Kind Regards
Cardwell Advisory Desk
