VAT will be introduced in the United Arab Emirates and Saudi Arabia from 1 January 2018. It is planned to roll it out to Bahrain, Kuwait, and Oman from 1 January 2019. You can see the UAE law here and the Saudi law here.

Businesses will need to make sure that:

  • They are registered if necessary (the UAE registration site is here; the Saudi one here)
  • They understand the VAT liability impacts on revenue and cost streams
  • Their supplier and customer contracts are adapted to allow VAT to be added (silent contracts will be deemed to be VAT inclusive, so the VAT will become your cost if your customer doesn’t pay)
  • Their accounting system will need to be able to record input and output VAT and discriminate between VATable and VAT-free revenue streams and VAT-deductible and non-deductible cost streams
  • Their AR systems will have to be able to produce legally compliant VAT invoices and their AP systems will need to be able to spot non-compliant supplier invoices

The law will not just impact businesses with Saudi and UAE entities or branches, but also non-established businesses that do certain project work there. For instance, businesses may generate a liability to VAT register and account for VAT on sales if they:

  • Buy and resell goods in the UAE or Saudi Arabia
  • Install goods in the UAE or Saudi Arabia
  • Perform educational services or conference services there

If you would like a free of charge conversation about the impact of VAT in the UAE on your business please contact William Morrison at Essentia (; +44(0)213 713 3535)

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