Value Added Tax (VAT) is an indirect tax imposed on the consumption of goods and services. A percentage of the value of a product or service is added at each stage of the supply chain, with the final consumer bearing the cost of this tax.
With respect to the State of Kuwait, VAT has not been implemented to date. Although Kuwait was among the countries that signed the Common VAT Agreement of the States of the Gulf Cooperation Council on 27 November 2016, no official date has been set for its implementation.
The Kingdom of Saudi Arabia and the United Arab Emirates implemented VAT at a rate of 5% starting from 01 January 2018, with Saudi Arabia later increasing the rate to 15%. Bahrain began applying VAT at 5% from 01 January 2019 and raised it to 10% effective from 01 January 2022. The Sultanate of Oman introduced VAT at 5% in April 2021. In contrast, both Kuwait and Qatar have not yet implemented VAT.
Baker Tilly will publish more information about VAT if any relevant updates arise.