Value added tax in Kuwait

[noor alb]

The sharp decline oil prices from $ 115 to less than $ 30 at the beginning of 2016 lead to deficit in the budgets of the Gulf countries, therefore the IMF and the World Bank recommended Gulf countries to find alternative source of income.
the introduction of VAT, an indirect tax imposed on the sale of goods or the importation of all goods and services “except those exempted by legal provision”, and borne by the final consumer. VAT was expected to be 5%.
There is an urgent need to change the culture of individuals and companies in consumption. Kuwait is no longer a surplus country, but has become a deficit. This may strengthen the trend towards changing the consumer culture of individuals and companies and seek to build a system consistent with the decline in oil revenues and the absence of diversification of sources of income.
As of the beginning of 2018, Saudi Arabia and the United Arab Emirates imposed a value added tax, while Kuwait failed to implement it due to the rejection of the National Assembly and in accordance with Kuwaiti law, the VAT law can not be passed without realizing this agreement to the Kuwaiti constitutional requirements
According to the unified value added tax agreement, “in the event that any Member State does not initiate the application of VAT after 1 January 2018, it will be treated as a State outside the GCC region, and any imports from those countries will be treated as Conducted in a third State outside the GCC region.

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