GCC VAT Rates 2026: A Country-by-Country Guide

If you sell across the Gulf, you have probably noticed that VAT is not the same in every GCC country. Four countries charge VAT at different rates, two still have no VAT at all, and each has its own registration threshold, tax number format and currency rules. This guide puts the GCC VAT rates for 2026 side by side, so you know what to charge, when to register and what your invoices must show.

GCC VAT rates in 2026 at a glance

All six GCC states signed the Unified VAT Agreement in 2017, which set a common framework with a 5% starting rate. Each country then had to pass its own national law. As of October 2026, the picture looks like this:

• Saudi Arabia: 15%. VAT started at 5% on 1 January 2018 and rose to 15% on 1 July 2020. It is the highest rate in the GCC.
• Bahrain: 10%. VAT started at 5% on 1 January 2019 and doubled to 10% from 1 January 2022.
• United Arab Emirates: 5%. VAT has applied since 1 January 2018 and the rate has not changed.
• Oman: 5%. VAT has applied since 16 April 2021.
• Kuwait: no VAT. Kuwait has not passed a VAT law. There is no confirmed start date.
• Qatar: no VAT. Qatar has not introduced VAT either. It does charge excise tax on some goods (such as tobacco, energy drinks and carbonated drinks) since 2019, but there is no general sales tax.

You will see many websites predicting a VAT launch date for Kuwait or Qatar. Treat these as guesses. Until the government publishes a law and implementing rules, businesses in those two countries should not add VAT to their invoices.

Country-by-country comparison table

The table below brings the main numbers together. Thresholds are based on the value of taxable supplies over a 12-month period (and, for voluntary registration, taxable expenses can usually count too).

Notice that the thresholds are roughly the same value in every VAT country (about USD 100,000 for mandatory registration), just expressed in local currency. Non-resident businesses are a different story: in most GCC VAT countries a foreign business that makes taxable supplies there has no threshold and may need to register from the first sale.

Registration thresholds explained

Mandatory registration

You must register when the value of your taxable supplies in the last 12 months is above the mandatory threshold, or when you expect it to go above that level in the coming period. For example, the UAE Federal Tax Authority says a business must register when its taxable supplies and imports exceed AED 375,000 (see the FTA registration page). Saudi Arabia uses SAR 375,000, as explained on ZATCA's VAT registration service. Oman's thresholds of OMR 38,500 and OMR 19,250 are set in a Tax Authority Chairman's decision.

Taxable supplies include standard-rated and zero-rated sales. Exempt sales do not count towards the threshold.

Voluntary registration

If your sales (or taxable expenses) are above the voluntary threshold but below the mandatory one, you may choose to register. Why would a small business do that? Mainly to recover the VAT it pays on purchases, or because large business customers prefer to deal with VAT-registered suppliers. The downside is extra paperwork: regular VAT returns, proper tax invoices and record-keeping.

Below the voluntary threshold

If you are not registered, you must not charge VAT and you must not call your document a "tax invoice". A normal commercial invoice without VAT is the correct document. Charging VAT without being registered can lead to penalties.

Standard-rated, zero-rated and exempt: what is the difference?

Every GCC VAT law sorts supplies into three groups. The rules differ in detail by country, but the general idea is the same.

• Standard-rated supplies are charged at the normal rate (15%, 10% or 5%). Most goods and services fall here.
• Zero-rated supplies are taxable, but at 0%. You show 0% VAT on the invoice and you can still recover the VAT you paid on related costs. Common examples include exports of goods outside the GCC, international transport, and certain medicines and medical goods. In Saudi Arabia, qualifying investment metals (gold, silver, platinum of high purity) are also zero-rated.
• Exempt supplies are outside the VAT charge altogether. You do not charge VAT, but you also cannot recover the VAT on costs linked to those sales. Typical examples are many margin-based financial services and the rental of residential property. Oman also exempts items such as local passenger transport and education, while in the UAE education and healthcare are generally zero-rated rather than exempt.

This is why you should always check the specific list in the country you sell in. The same service (for example, education) can be zero-rated in one GCC country and exempt in another, and that changes both your invoice and your VAT recovery.

What this means for your invoices

When to show VAT

Show VAT on an invoice only when you are VAT-registered in that country and the supply is taxable there. If you are registered, your invoice should normally carry the title "Tax Invoice" and show:

1. Your legal name, address and VAT/TRN number.
2. The customer's details (and their VAT number for business customers where required).
3. A unique, sequential invoice number and the date of issue.
4. A description of the goods or services, quantity and unit price.
5. The VAT rate and VAT amount for each line or in total.
6. The total including VAT, with the VAT shown in the local currency.

Each country has its own detailed list. Saudi Arabia, for example, requires Arabic on the invoice and separates full "tax invoices" from "simplified tax invoices". The UAE also allows a simplified tax invoice in some cases, such as sales to unregistered customers.

Tax number formats

A wrong tax number is one of the most common invoice errors in the Gulf. Check the format before you send:

• Saudi Arabia: 15 digits, starting with 3 and ending with 3.
• UAE: 15-digit TRN, usually starting with 100. You can verify a TRN on the FTA's EmaraTax portal.
• Bahrain: 15-digit VAT account number issued by the National Bureau for Revenue (NBR).
• Oman: VAT identification number in the form OM followed by 10 digits.

Currency decimals

Kuwaiti dinar, Bahraini dinar and Omani rial are divided into 1,000 sub-units, so amounts need three decimals (for example, BHD 12.375 or OMR 4.250). Saudi riyal, UAE dirham and Qatari riyal use two decimals. If your invoicing software rounds a BHD or OMR amount to two decimals, your VAT figure may be slightly wrong, and over many invoices the difference adds up in your VAT return.

E-invoicing is coming to more countries

Saudi Arabia already requires electronic invoicing (FATOORA), with businesses joining the integration phase in waves. The UAE has announced a mandatory e-invoicing system, starting with large businesses from January 2027 and other VAT-registered businesses later in 2027. If you are VAT-registered in either country, keep an eye on official announcements, because a PDF alone may not be enough for your official tax invoices in future.

Selling to customers in another GCC country

Cross-border sales inside the GCC can be tricky because there is no fully working GCC-wide system for sharing VAT information between states yet. In practice, each country treats sales to the other GCC states under its own transitional rules, and exports of goods to a customer outside the country are often zero-rated if you keep proof of export. For example, a UAE company selling goods to a customer in Kuwait will usually treat it as an export, while a Kuwaiti business selling to a UAE customer charges no VAT at all because Kuwait has no VAT.

If you regularly sell across borders, ask a local adviser how each flow should be treated. Getting this wrong is one of the most expensive VAT mistakes for small traders.

Key takeaways

• GCC VAT rates in 2026: Saudi Arabia 15%, Bahrain 10%, UAE 5%, Oman 5%. Kuwait and Qatar have no VAT.
• Mandatory registration thresholds are SAR 375,000, AED 375,000, BHD 37,500 and OMR 38,500; voluntary thresholds are half of these.
• Zero-rated means 0% VAT with input VAT recovery; exempt means no VAT and no recovery.
• Only registered businesses may charge VAT or issue a "tax invoice".
• Use three decimals for KWD, BHD and OMR, and two for SAR, AED and QAR.

Frequently asked questions

Is there VAT in Kuwait or Qatar in 2026?

No. As of October 2026, neither Kuwait nor Qatar has VAT in force. Both signed the GCC VAT agreement, but neither has published a national VAT law with a start date. Qatar does charge excise tax on certain goods.

Which GCC country has the highest VAT rate?

Saudi Arabia, at 15%. Bahrain is second at 10%, and the UAE and Oman both charge 5%.

Can I register for VAT if my sales are below the threshold?

Yes, if your taxable supplies or taxable expenses are above the voluntary threshold (for example, SAR 187,500 or AED 187,500). Below that level, you generally cannot register.

Do I need three decimals on a Kuwaiti invoice even without VAT?

Yes. The Kuwaiti dinar has 1,000 fils, so prices and totals are normally written with three decimals, such as KWD 15.750. This is about the currency, not about VAT.

What is the difference between zero-rated and exempt?

Both mean you do not add VAT to the price. With a zero-rated supply you can still recover the VAT you paid on related costs; with an exempt supply you cannot.

If you need a clean, bilingual invoice with the right VAT rate and currency decimals for your country, you can create one with the GCCInvoice tax invoice generator or start from the Saudi, UAE or Kuwait invoice pages.

This article is general information, not tax or legal advice. Rules change, so check with the relevant tax authority or a qualified adviser before acting. Last reviewed: October 2026.