The unofficial English version of the GCC Unified Agreement on Value Added Tax (GCC UAVAT) is being issued; as the Arabic version of GCC, UAVAT has been publicized by the Saudi Official Gazette.
The GCC UAVAT makes provision for the Value Added Tax (VAT) in all the six Emirates of GCC. The salient details for the free zones and the list of edibles still await. The GCC UAVAT lays importance for ties between all the GCC Emirates in all sectors to solicit the economic incorporation and to have a “unified legal framework” for Value Added Tax (VAT).
The GCC UAVAT contents are alike to the VATs globally, the content has also given insight on the enactment of VAT to the long-term business contracts holders whose materials are produced earlier and for those whose materials are produced later.
The GCC UAVAT also was known as the “local law” is more uniform than we might have expected where each member state will be implementing its own VAT tax law and subordinate legislation. The importance has been laid on the nature of the GCC Agreement and the VAT. The GCC UAVAT is adamant towards the solidarity and constancy among the GCC. The “Common Customs Law” and the “Ministerial Committee” i.e., the Financial and Economic Cooperation Committee of the GCC Member States are incorporated. The Ministerial Committee is authorized for concerns regarding the application, changes in the registration and to clarify of the GCC UAVAT, the resolution will be made by the all the Member States.
The GCC UAVAT emphasizes on the digital era and implants the VAT system to be effortless for which each Member of GCC is obliged to generate an “Electronic Services System”. The Managing Director – Christine Lagarde of IMF on her February visit to the UAE also conveyed that the GCC UAVAT should be user-friendly to prosper. The electronic system should be vigorously equipped for generation of evidence for all movements involved in the transaction.
It is essential for the GCC Member States to provide tax periods, tax returns, refund, and payments. The GCC Member States can also converse the tax information online and has the right to appeal and object. They shall also possess jurisdiction over Education, Health, Weather & Real Estate but they will be exempted from the local transport division. We await for more precise decisions.