What Bahrain should learn from VAT in UAE and KSA?
Lessons learned from Saudi Arabia & UAE implementations
What Bahrain should learn from VAT in UAE and KSA?: Difficulties related to that fact that these were full introductions of new VAT systems. As a result, the main focus was not on foreign suppliers of digital services to consumers in these GCC Member States.
The focus and energy of tax authorities were, naturally, that local companies got it right.
One major source of confusion, for example, has been on the issue of a sales threshold. Thresholds only apply to local suppliers.
No sales threshold exists (in the Saudi Arabian and the UAE implementations) for foreign-based digital service suppliers with consumers in these GCC Member States.
The rules that specifically relate to foreign-based suppliers were published slightly later than the original VAT rules.
This meant that for example in Saudi Arabia, the requirement for an agent was revealed after the original VAT implementation date of January 1, 2018. This requirement was confirmed in early February, as a result, registrations have been slightly delayed.
This situation is expected, of course, with such a major implementation and will have no major consequences.
Now the relevant tax authority positions towards foreign-based suppliers and the specific requirements that relate to them are much clearer. This clarity will lead to much smoother registration levels and increased compliance.