How Will VAT Impact The GCC Education Sector?

As the VAT drive in the GCC gathers momentum, this article focuses on the potential VAT issues for the education sector.

The United Arab Emirates ("UAE") and the Kingdom of Saudi Arabia ("KSA") have announced that VAT will be implemented on 1 January 2018. The other GCC countries have yet to make an official announcement on the implementation date.

At the time of writing, of the GCC countries, only KSA has published a draft VAT law and implementing regulations on 29 May and 19 July 2017 respectively. 

Overview of VAT in the GCC

VAT registered businesses that supply goods and services are subject to VAT at either the standard rate or zero rate. Businesses are entitled to claim a credit for VAT paid on their purchases if they relate to a supply that is standard rated or zero rated. However, any VAT incurred in connection with a supply that is exempt from VAT cannot be reclaimed.