30th October 2018
VAT update in Oman & Bahrain
The six Gulf Cooperation Council ("GCC") member states, Saudi Arabia ("KSA"), Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates ("UAE"), agreed and signed a Framework Agreement at the end of 2016 for the introduction of VAT by the 1st January 2018. On 1 January 2018 both the UAE and KSA implemented VAT. The other 4 nations deferred implementation due to concerns over a lack of technical readiness in adopting the changes.
Bahrain is the next country to implement VAT. On October 8, the upper house of Parliament, ratified a bill authorising the introduction of a 5% value-added tax (VAT) to come into effect on January 1 2019.
The introduction of VAT will be a big challenge for the local Bahrain market as businesses now have less than four months to be prepared for these changes. The implementation of VAT was one of a number of reforms announced by Bahraini authorities, which also includes changes to its pension system and a new subsidy programme.
Oman and Qatar are also expected to implement VAT sometime in 2019.
The Oman Ministry of Finance is targeting September 1, 2019 for implementation of the Value Added Tax (VAT) in Oman, but the date is under review and not yet finalized. For a brief update on the VAT in Oman click HERE