Key points
- Standard VAT: UAE 5%, Oman 5%, Bahrain 10%, Saudi Arabia 15%; Kuwait and Qatar have not introduced VAT.
- Import VAT base = CIF value + customs duty (usually 5%) + excise, so 5% VAT on a CIF value is really 5.25% of CIF.
- VAT is national: goods moved between GCC states pay VAT in the destination state, even when customs duty is not charged again.
- In 2026 the UAE, Saudi Arabia and Qatar moved sweetened drinks to a sugar-content excise; Kuwait has no excise at all.
- The UAE lets VAT-registered importers account for import VAT in their return instead of paying it at the border.
VAT rates in GCC countries at a glance
All six GCC states signed the GCC VAT Framework Agreement in 2016, but each one brings VAT into force through its own law and sets its own standard rate above the agreed 5% minimum. Four states have done so. The UAE and Saudi Arabia started on 1 January 2018, Bahrain on 1 January 2019 and Oman on 16 April 2021. Saudi Arabia tripled its rate to 15% on 1 July 2020, and Bahrain doubled its rate to 10% in 2022. Kuwait and Qatar have not introduced VAT as of November 2026.
| Country | Standard VAT | In force since | Tax authority |
|---|---|---|---|
| United Arab Emirates | 5% | 1 January 2018 | Federal Tax Authority (FTA) |
| Saudi Arabia | 15% (5% until 30 June 2020) | 1 January 2018 | ZATCA |
| Bahrain | 10% (5% until 2022) | 1 January 2019 | National Bureau for Revenue |
| Oman | 5% | 16 April 2021 | Oman Tax Authority |
| Qatar | No VAT | Not introduced | General Tax Authority (excise only) |
| Kuwait | No VAT | Not introduced | No VAT or excise as of 2026 |
One framework, six national laws
The framework sets shared principles: a minimum standard rate of 5% on supplies and imports, common categories for exemptions and zero rating, and rules for trade between members. In 2026 the agreement was amended. According to PwC's June 2026 summary, import VAT is paid at the first point of entry and can then be transferred to the destination state through the Makasa electronic settlement system, members may allow businesses to defer import VAT through their returns, and tax authorities gain access to data on intra-GCC supplies. Each state must enact its own measures before these changes apply, so for now each national law still decides how you pay.
- Import VAT 5% on CIF plus duty plus excise
- VAT-registered importers can account for import VAT in their VAT return (reverse charge) instead of paying at the border
- Unregistered importers pay at customs clearance
- Excise: sugar-content model for sweetened drinks since 1 January 2026
- Highest VAT rate in the GCC since July 2020
- Import VAT collected at customs; a deferment scheme is available under conditions
- Many customs duty lines are above 5%, which raises the VAT base too
- Excise: four-tier sugar model for sweetened drinks since 1 January 2026
- VAT since 16 April 2021
- Import VAT deferment available to qualifying registered businesses
- Excise believed to stay on the 50% and 100% model; no sugar-tier adoption confirmed
- Tax stamps required on some excisable beverages imported for the local market
- VAT since 1 January 2019, standard rate 10% since 2022
- Import VAT is calculated on the same CIF plus duty plus excise base
- Excise believed to stay on the 50% and 100% model; no sugar-tier adoption confirmed
- Our team confirms the payment method for your company before shipping
The import VAT base: CIF plus duty plus excise
At the border, VAT is not charged on the invoice price alone. The base is generally the customs value (CIF: goods plus insurance plus freight to the first GCC port) plus customs duty plus any excise tax. Because duty is part of the base, a 5% VAT really costs 5.25% of CIF for a normal 5% duty item, and Saudi Arabia's 15% costs 15.75%. Where duty is higher, or excise applies, the gap grows. The example below uses a CIF value of USD 10,000 and the normal 5% duty, with no excise.
| Country | Duty 5% of CIF | VAT base | Import VAT | Duty + VAT |
|---|---|---|---|---|
| UAE | 500 | 10,500 | 525 (5%) | 1,025 |
| Oman | 500 | 10,500 | 525 (5%) | 1,025 |
| Bahrain | 500 | 10,500 | 1,050 (10%) | 1,550 |
| Saudi Arabia | 500 | 10,500 | 1,575 (15%) | 2,075 |
| Kuwait | 500 | No VAT | 0 | 500 |
| Qatar | 500 | No VAT | 0 | 500 |
Most goods from China pay 5% GCC duty on CIF, once, at the first GCC entry. VAT is on CIF + duty. Estimate only.
Excise tax: where the rates really differ
| Product | Long-standing rate (UAE, KSA, Oman, Qatar, Bahrain) | 2026 position |
|---|---|---|
| Tobacco and tobacco products | 100% | No change found; tax stamps required in several states |
| Electronic smoking devices and liquids | 100% | No change found |
| Energy drinks | 100% | No change found in UAE and KSA; confirm per state |
| Carbonated drinks | 50% | In sugar-model states, depends on sugar content |
| Sweetened drinks | 50% of retail price | Sugar-content tax in UAE and KSA (1 January 2026) and Qatar (6 July 2026) |
| Any excise product in Kuwait | None | Kuwait applies no excise |
The new sugar model taxes sweetened drinks by grams of sugar per 100 ml instead of a percentage of price. In the UAE, drinks with 8 g or more per 100 ml pay AED 1.09 per litre, drinks with 5 g to under 8 g pay AED 0.79 per litre, and drinks under 5 g or with only artificial sweeteners are exempt. Saudi Arabia uses four tiers and also covers concentrates, powders, gels and extracts. Qatar taxes only medium- and high-sugar drinks under Law No. 2 of 2026. We have not verified the Saudi and Qatari per-litre amounts, so our team confirms them per product.
Moving goods between GCC states: which VAT applies
- Duty is paid onceCustoms duty is collected at the first GCC point of entry; the next state does not charge it again if you show proof of payment.
- VAT follows the goodsMoving goods from one VAT state to another is treated as an export from the first and an import into the second.
- Destination VAT is chargedThe destination charges its own rate: send cleared goods from Dubai to Riyadh and Saudi 15% VAT applies on arrival.
- Recover or zero-rate in the first stateA registered business can usually treat the movement out of the first state as an export, subject to its rules and evidence.
- Kuwait and QatarGoods moved there pay no VAT, but the destination's customs paperwork, permits and product rules still apply.
Key terms and a quick test
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GCC VAT quick check
Before you price a Gulf import
0/7Frequently asked questions
What are the VAT rates in GCC countries in 2026?
UAE 5%, Oman 5%, Bahrain 10% and Saudi Arabia 15%. Kuwait and Qatar have not introduced VAT.
Which GCC country has the highest VAT?
Saudi Arabia, at 15% since 1 July 2020. Bahrain is second at 10%.
How is import VAT calculated in the GCC?
VAT is charged on the customs value (CIF) plus customs duty plus any excise. For a 5% duty item that means 5% VAT costs 5.25% of CIF and 15% VAT costs 15.75%.
Does Kuwait have VAT in 2026?
No. Kuwait has no VAT and no excise as of November 2026, and a July 2026 report said VAT is not in its 2026–2030 fiscal plan. Customs duty still applies.
Does Qatar have VAT?
No. Qatar has not introduced VAT, but it applies excise on goods such as tobacco and energy drinks, and a sugar-based excise on sweetened drinks since 6 July 2026.
If I pay VAT in Dubai, do I pay again in Saudi Arabia?
Yes, Saudi VAT applies when the goods are imported into Saudi Arabia, because VAT is national. Customs duty, however, is not charged twice if you show proof it was paid in the UAE.
Sources
- PwC: GCC Unified VAT Agreement changes (June 2026)
- UAE Federal Tax Authority: conformity certificates and high-sugar classification
- QNA: Qatar General Tax Authority implements excise mechanism on sweetened drinks (6 Jul 2026)
- KPMG Saudi Arabia: amendments to the Excise Tax Implementing Regulations
- Gulf News: From January 1, UAE sugar tax changes how much you pay for sweetened drinks
- Oman Observer: Oman mandates tax stamps on imports of excisable beverages
- VATupdate: Kuwait keeps VAT off the table in the 2026–2030 fiscal plan (Jul 2026)
- UAE ICP: The Concept of the Customs Union
General information checked on the date shown. Rules and rates change: our team confirms the details for your shipment.