Do business selling across the GCC register in each country?

A business selling across the GCC will only be required/entitled to register for VAT in another member state if the nature of its supplies of goods and services requires it to be (e.g. the place of supply is in another GCC member state and the reverse charge mechanism cannot be used).

Source: Deloitte

Will there be group registration for companies in the GCC?

Based on the GCC Agreement, member states do have the discretion to implement VAT groups. The UAE and KSA laws indicate that grouping will be available for groups of legal persons established in these respective countries, depending on control requirements being met.

Source: Deloitte

If only residents can be VAT registered, does this mean that offshore companies cannot be VAT registered?

There is a requirement for non-residents to register for VAT in the GCC, in the event that they need to pay VAT on supplies made by them in a GCC member state (e.g. the place of supply is in the GCC and the customer is not able to self-account for the VAT due under the reverse charge mechanism).

Source: Deloitte

What do we know about the establishment VAT registration requirement?

If an entity has a Permanent Establishment (PE) for corporate tax purposes in a member state, then it is very likely to also have an establishment for VAT purposes in that country. The bar for a PE is arguably higher than that for having an establishment for VAT purposes. Where it is unclear which establishment of a legal entity (i.e. the head office or the PE) has made the supply then an analysis would be required as to the establishment most closely connected with the supply. Where such a PE is considered to be making taxable supplies, a VAT registration would be required.

Source: Deloitte

What is the method of registration for VAT?

VAT registration is expected to be largely online. Additional documentation may be requested offline (likely to vary by GCC member state).

Source: Deloitte

When to use your VAT number?

A customer VAT number will be needed to enable a supplier of goods and services to a recipient in another GCC country to invoice without VAT. In the long run, a portal to enable the checking of VAT numbers is expected to be made available.

Source: Deloitte

What are the VAT registration requirements?

An established business in the GCC performing economic activities register for VAT if it performs taxable supplies or imports that exceed the mandatory registration threshold of SAR375,000 (or the local equivalent) and may choose to register for VAT voluntarily if its supplies and imports are less than the mandatory registration threshold but exceed the voluntary registration threshold of SAR187,500.

Source: Deloitte

Will businesses established in one GCC member state and providing services to individuals (i.e. nontaxable persons) in another member state be required to register for VAT in that second member state?

It is unlikely that a second registration would be required. The place of supply for services supplied to individuals is normally the country of the supplier, which would require the supplier to charge VAT from the country in which the supply is made.

Source: Deloitte

What information needs to be provided for the Group Registration?

Information required from the Group Representative:

  • VAT eligible sales/purchases information at the total Group level
  • Effective date requested for Group Registration

Information required for other Group members:

  • Tax Identification Number if any
  • VAT eligible sales/purchases information
  • Proof of association with Group member with common control, e.g.
    • Articles of association/memorandum of association
    • Audited documents such as audited financial statements
    • Other documents evidencing “common control”

How to register for a VAT Group?

A request to form a VAT Group should be made by one of the Group members – who must already be individually registered for VAT. The Group representative will have the primary obligation to comply with the obligations and rights of the Group on behalf of all members, without prejudice to the joint liability of the remaining members of the Group.

As part of the registration process, the applicant will be required to provide supporting documentation to evidence that the eligibility criteria are met.

If the application is approved by GAZT, the VAT Group will inherit the VAT account number of the Group representative. The VAT account numbers of the other Group members will be deactivated. Deactivation of the VAT account number prevents Group members from receiving individual filing obligations but it does not mean that they are deregistered from VAT.

Group registration will be available through the GAZT e-portal once activated.