GCC finance ministers are on a tight timeline to implement the first phase of VAT across the region before a 2018 deadline, according to EY.
Following a meeting of GCC finance ministers in June, where the measure was approved, GCC chairman Ahmad bin Mohammed al-Khalifa, Bahrain’s finance minister, said some procedural aspects were yet to be discussed.
The VAT framework is expected to be agreed at the next meeting of the GCC Financial and Economic Cooperation Committee in October 2016.
Meanwhile, some individual GCC members have already made announcements regarding the tax.
Qatar, as part of its June economic update, said it would introduce a 5% VAT rate in 2018.
EY, quoting UAE finance ministry undersecretary Younis Al Khoury, said companies in the UAE with annual revenues above AED3.75m ($1.021m) would be obliged to be registered under the GCC VAT system.
Companies whose revenues fall between AED1.87m ($509,000) and AED3.75m ($1.021m) will have the option to register for VAT during the first phase of the VAT implementation. However, when the second phase is rolled out at a yet-to-be-specified date, all companies, regardless of reported revenues, must register for the tax.