The Council of Ministers approved amendments to the GCC Unified VAT Agreement, enhancing cross-border VAT administration and allowing member states flexibility in setting VAT rates, while improving tax capture and cooperation.
Saudi Arabia Confirms GCC Unified VAT Agreement Updates
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Author: Ema Stamenković
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Content accuracy validation date:
30.06.2026
Content accuracy validation time:
08:05h
The Council of Ministers has approved amendments to the GCC Unified VAT Agreement, which originally established harmonized VAT in the region (Saudi Arabia introduced VAT at 5% in January 2018, raised to 15% in July 2020 due to COVID-19 deficits).
Main changes:
- Cross-border goods: VAT will now be attributed to the country where goods are ultimately transported or consumed.
- Non-registered persons: If proof of VAT payment in the originating country is missing, the destination country may collect VAT at the point of entry.
- Rate flexibility: Each GCC country retains the right to set its own standard VAT rate under domestic law, provided it remains at or above 5% (unless exemptions or zero-rating apply).
- Transit goods: If goods enter one GCC country but are destined for another, VAT may be collected at the first entry point and later reconciled with the final destination.
- Registered businesses: VAT-registered businesses may account for import VAT directly through their VAT returns, depending on local implementation rules.
- Tax authority cooperation: New rules expand information exchange and access on intra-GCC transactions between member states.
The amendments refine administration of cross-border VAT and ensure proper tax capture across the region.
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