Sector Impact > Trading


This is the largest sector in the region and more prominently in the UAE which acts as the central trading hub for the Middle East.


  1. Importers

Import from outside GCC: The Importer should pay the Tax due on importation to the Customs Authority of the Ministry of Interior if the Kingdom is considered to be the first entry point for those Goods under the Reverse Charge Mechanism and then claim the Input Tax Credit in the tax return. The Reverse Charge Mechanism places the burden of declaring the VAT on the importer if the import is from outside the GCC.  

Import from GCC: For intra-GCC imports, the supplier will pay the VAT in their country of origin, but the local importer will not be allowed to claim the Input Tax. The importer in the country of destination can claim the input tax credit. For example, Goods are imported into Dubai and later exported to Bahrain, the registered entity in Dubai should reverse the input tax credit claimed earlier in its return.

Till the date of notifying the implementing states, all the GCC countries will be treated at par with outside GCC countries.

2. Local Purchases 

Organizations that purchases from the local tax registered vendors have to pay the VAT on purchase value to the vendor and then claim the input tax credit in the periodic return.


  1. Local Sales

All local sales will be subject to the Standard rate of 5% unless the goods or services are under Exempt or Zero-rated categories. VAT 5% has to be calculated on the value of goods after discounts, price reductions etc.

Traders must ensure that either they prepare separate invoices for each tax category or include the tax rate for each item separately. Each invoice must then declare the sum of the tax charged in each category to enable the buyer to calculate the tax credit available.

The Taxable Person should issue a Tax Invoice latest by the 15th day from the end of the month in which the Supply took place.

2. Exports

All exports outside the GCC will be Zero rated and 0% tax will be charged.

However, exports to GCC states (who have implemented VAT) will be treated differently depending on whether it is sold to a tax-registered entity in the buyer state (no VAT to be charged by the seller) or it is being sold to an end consumer, not Tax registered (VAT to be charged by the seller). Till the date of notifying the implementing states, all the GCC countries will be treated at par with outside GCC countries.

Sector impact analysis is provisional based on the GCC Draft and may change when the country issues the relevant VAT laws.