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Kuwait 5% VAT implementation Jan 2023

Fifth of the six Gulf states to implement VAT

The Arab Gulf state of Kuwait is considering a plan to implement Value Added Tax (excise duties 2022) on 1 January 2023 – but Parliamentary opposition remains high This will be part of the plan agreed by the six Gulf Cooperation state on creating a VAT and Customs Union. This reflected the requirement to stabilise government revenues as global oil prices declined from a high of $130 per barrel ten years ago to around $68 today. So far, Saudi Arabia, the UAE, Bahrain and Oman have introduced VAT. The sixth state, Qatar, has still not set a date.

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Kuwait sets VAT launch date

In the Ministry of Finances’ annual results for the state to March 2021, it set 2023 as the date for the implementation of VAT, which customs coming in one year earlier in 2022. This could raise KD 1.7billion (approx €5billion or $5.7billion) by 2025.

The new indirect tax introductions remain subject to parliamentary approval.

Gulf Cooperation Council 2017 VAT agreement

The six Gulf states agreed in 2016 to introduced VAT in their respective states, and to create a VAT and Customs Union – similar to the European Union model. This would seek to harmonise the rules keep rates broadly similar. The all signed the a unified agreement, and it came into force on 1 February 2017.

Preparing VAT returns For any of the Arab Gulf states can be challenging.  VAT Calc’s single platform VAT Filer can accurately complete any country filings with verified transactional data from our VAT Calculator or VAT Auditor integrated tools.

Arab Gulf GCC VAT implementations

Jan 2023 Kuwait decides between VAT or excise taxes
2022 Qatar provisional plans to implement VAT
Jan 2022 Bahrain doubles VAT to 10%
16 Apr 2021 Oman introduces 5% VAT
1 Jul 2020 Saudi Arabia trebles VAT to 15%
1 Jan 2019 Bahrain launches 5% VAT regime
1 Jan 2018 Saudi Arabia and UAE introduce 5% VAT regime
2016 VAT and Customs Union agreement: Bahrain; Kuwait; Oman; Qatar; Saudi Arabia; UAE United Arab Emirates

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