VAT refund in Gulf countries : UAE – Saudi Arabia – Bahrain – Oman
Established in 1981, the Gulf Cooperation Council is a political and economic union of six Arab states of the Persian Gulf: United Arab Emirates, Saudi Arabia, Bahrain, Oman, Kuwait and Qatar.
Due to the historically low oil prices, the six GCC countries signed in 2016 the VAT framework agreement adopting a new indirect tax system in the Gulf region. Consequently, the VAT was implemented in 2018 by the UAE and by the Kingdom of Saudi Arabia, followed by the Kingdom of Bahrein in 2019 and by Oman in 2021. Kuwait and Qatar have not implemented the VAT at this stage because of the high inflation and of the economic slowdown.
VAT reclaim procedure
Fixed between 5% and 15%, the GCC VAT is recoverable by foreign non-registered companies on most non-exempted business expenses, following specific rules:
| VAT reclaim | Bahrain | KSA | Oman | UAE |
|---|---|---|---|---|
| GCC states | Bahrain | Saudi Arabia | Oman | United Arab Emirates |
| VAT rates | 10% | 15% | 5% | 5% |
| Refund period | 12 months | 12 months | 6 months | 12 months |
| Minimum VAT | BHD 200 | SAR 1,000 | OMR 100 | AED 2,000 |
| Tax Authority | NBR | ZATCA | OTA | FTA |
| Reclaim Process | online | online | ||
| Deadline Y-expenses | 31/03/Y+1 | 30/06/Y+1 | 30/06/Y+1 & 31/12/Y | 31/08/Y+1 |
Eligibility
Several eligibility conditions of VAT refund must be fulfilled by non-resident companies:
- absence of fixed establishment and of taxable operations in GCC countries
- valid VAT registration in the country of establishment
- allocation of expenses to non-exempted business activities
- existence of similar vat refund mechanism in the country of establishment / reciprocity
Documentation
For claiming VAT refunds in GCC states, the applicants must address to the competent tax authorities the complete documentation:
- Proof of incorporation and tax certificate from the country of establishment
- ID of the authorised contact person and related proof of authority
- Bank details confirmation for VAT repayment
- Tax bills with payment proofs
- Claim form with the listing of tax bills
- Any additional requested elements
BtoBnice will be happy to provide you advice and operational support for your VAT reclaim in Gulf countries: contact@btobnice.com
