The GCC countries, through the GCC Common VAT Agreement, have
agreed to introduce VAT within their systems. The initial aim was
to have the VAT system introduced into the economy across all
countries by the start of 2018, except for two countries which were
given until the beginning of 2019 to implement the same.
Value Added Tax or VAT is a tax that is placed on goods and
services where the value is added to the products sold at different
points throughout the sales processes. While the entity selling the
product does pay the tax to the government, they do not pay it
based on their earnings; but rather the consumers are charged an
additional amount payable to the government. In the GCC, the
initial VAT rate is at 5%.
