GCC VAT Regime – Middle East

The Unified Agreement for Value Added Tax (VAT) of the Cooperation Council of Arab States of the Gulf, sets out the framework under which VAT can be implemented in each of the GCC member states. Once the agreement is ratified, each member state must integrate the framework into local law and implement VAT.

A major challenge for the countries implementing VAT is to have the necessary adequate training, technical systems, financial and tax governance and compliance, and other areas in order to meet all requirements.

Know GCC VAT better:

  • GCC VAT is an indirect tax applied on the consumption of most Goods and Services.
  • It is levied by VAT registered businesses that supply goods and services in the course or furtherance of their business.
  • It is also applicable on the import of Goods.
  • GCC VAT is levied at each stage in the supply chain and is collected by businesses on behalf of the government.
  • VAT is incurred and paid by the end consumer.


  • VAT Rate: Standard rate of GCC VAT would be 5% unless exemption is applied like education, food, oil etc.
  • Export: Export of goods outside GCC would be subject to zero rate.
  • Import: There would be import VAT at standard rate for goods and for import of services could be under reverse charge mechanism
  • Reverse Charge: Supplies of goods and services from VAT registered person in one-member state to a GCC VAT registered person in another member state are subject to reverse charge mechanism.
  • Applicability: Business with an annual revenue of over SAR375,000 will be required to register for VAT Purpose.



  • Industry specific VAT requirements.
  • Legal Compliance.
  • Accurate VAT reporting.
  • Meeting Deadlines – VAT returns / Cash Management & Tax Liability.
  • Impact on Sales and Purchase transactions.
  • Ensuring Data Integrity / Master Data changes and validations.
  • Complex rules viz. Cross-border services, Transition Rules, mixed supply, etc.


  • Government Mandate to ascertain compliance versus efforts, time line and budget.
  • Complex rules to manage special conditions.
  • Interfaces / SAP customizations for VAT enablement
  • Long-term SAP solution with minimal impact to entire supply chain and related financial accounting
  • Managing transition scenarios for users with low TCO to drive business continuity.
  • Well tested, Stable and Consistent upgrade path for VAT functionality.
  • Cost of Development for custom VAT applications, Forms and Reports increase the overall TCO.

eBorn Approach:

Holistic Engagement Approach: 

  1. Impact Analysis
  2. Business Blueprint
  3. Realization
  4. Final Preparation & Go-Live
  5. Support

Engagement Model:

To know more about eBorn VAT Accelerator Solution ‘BLAZE’ for GCC and more details about the projects already completed in GCC countries, download the Solution Document.



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