Kuwait Follows Other GCC Countries To Introduce Value-Added Tax (VAT)

VAT was introduced across the UAE in 2018 at a standard rate of 5%.

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Kuwait Follows Other GCC Countries To Introduce Value-Added Tax (VAT)

Kuwait Follows Other GCC Countries To Introduce Value-Added Tax (VAT)

Kuwait is considering the introduction of value-added tax (VAT) as Gulf Cooperation Council (GCC) nations are reforming their tax frameworks to diversify revenue sources and align with global standards, according to the reports. Other GCC countries including Saudi Arabia and Bahrain are adopting measures to increase their VAT rates.

Reportedly, Saudi Arabia and Bahrain have increased VAT rates to 15% and 10% respectively. Qatar and Kuwait are also expecting to introduce VAT soon, to further diversify income beyond oil revenues. VAT was introduced across the UAE in 2018 at a standard rate of 5%.

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The introduction of VAT represents a pivotal step in the region’s economic transformation, providing governments with additional revenue to reinvest in infrastructure, public services, and sustainable development. These efforts align with broader global trends as GCC nations modernize their economic and reduce dependence on hydrocarbons.

GCC coutries are also implementing the OECD endrosed global minimum corporate tax rate of 15%, targeting multinational corporations with revenues exceeding 750 million euros. This is designed to curb tax avoidance and esure fair contributions from companies operating in historically low-tax jursidictions, such as Dubai and Manama.

The UAE has introduced a 9% coporate tax for businesses with profits above AED 375,000, while maintaing exemptions for small and medium enterprises and tax-free zones to retain its competitive edge. Kuwait, along with other GCC nations, has implemented the 15% profit tax rate, and Bahrain is set to align with global tax regulations by 2025. Suadi Arabia and oman have also signelled towards a unified approach to corporate taxation, while Qatar has maintained a 10% corporate tax rate.

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Despite these, the GCC remains attractive for businesses, owing to its no-income-tax policy. While Oman has considered a personal income tax for high earners, most GCC nations remain committed to a tax-free income environment.