VATGCCSaudi ArabiaBahrainOmanUAE tax

VAT rates GCC 2026: UAE, Saudi, Bahrain, Oman

5 October 20267 min readAxion ERP Team — GCC Finance & Compliance

A sourced comparison of VAT rates GCC 2026 for the UAE, Saudi Arabia, Bahrain and Oman, covering thresholds, authorities, and the Kuwait and Qatar VAT status.

VAT rates GCC 2026: these figures range from 5 percent in the UAE and Oman to 15 percent in Saudi Arabia and 10 percent in Bahrain, while Kuwait and Qatar still had no VAT law in force as of the July 2026 update from Baker McKenzie. If your business trades in more than one Gulf state, you cannot apply a single VAT rate or a single registration rule across the group. Each country sets its own rate, its own registration thresholds and its own authority, and a transaction that is taxable in one state may be exempt, zero-rated or outside scope in another.

This matters for anyone running finance across more than one GCC entity: payroll, invoicing and VAT returns are all country-specific, and a single rate table will not cover a multi-entity group.

VAT rates GCC 2026: country by country

Country	Standard VAT rate	Mandatory registration threshold	Voluntary registration threshold	Authority
UAE	5%	AED 375,000	AED 187,500	Federal Tax Authority
Saudi Arabia	15% (since 1 July 2020)	SAR 375,000	SAR 187,500	ZATCA
Bahrain	10% (since 1 January 2022)	BHD 37,500	not stated in the source reviewed	National Bureau for Revenue
Oman	5%	OMR 38,500	not stated in the source reviewed	Tax Authority (Oman)
Kuwait	not implemented as of July 2026	not applicable	not applicable	not applicable
Qatar	not implemented as of July 2026	not applicable	not applicable	not applicable

UAE: 5%, with two registration thresholds

The UAE's Federal Tax Authority sets the standard rate at 5 percent. Mandatory registration applies once taxable supplies and imports exceed AED 375,000, and voluntary registration is open from AED 187,500. Below the voluntary threshold, a business is simply outside the VAT system.

Saudi Arabia: 15% since July 2020

Saudi Arabia raised its standard VAT rate from 5 percent to 15 percent effective 1 July 2020, as confirmed by PwC's Worldwide Tax Summaries. A ZATCA guideline dated May 2026 confirms the mandatory registration threshold remains SAR 375,000, with voluntary registration available from SAR 187,500 in taxable supplies or expenses over a 12-month period. Saudi Arabia also runs ZATCA Phase 2 e-invoicing on top of VAT, a separate compliance track covered in our ZATCA Phase 2 guide.

Bahrain: 10% since January 2022

Bahrain's standard rate moved from 5 percent to 10 percent on 1 January 2022, according to Bahrain's official VAT portal. The mandatory registration threshold is BHD 37,500, according to Bahrain's official VAT guidance. We have not found Bahrain's VAT filing cadence stated on nbr.gov.bh, so confirm return frequency directly with the Bureau rather than assuming it matches another GCC state.

Oman: 5%, registration from OMR 38,500

Oman applies a standard VAT rate of 5 percent, confirmed by PwC and by the Omani Tax Authority's VAT FAQ page. The mandatory registration threshold is OMR 38,500, set by a Tax Authority Chairman's Decision. As with Bahrain, we have not found a filing cadence stated on taxoman.gov.om, so check the current return period with the Tax Authority before you build a reporting calendar.

Kuwait and Qatar: no VAT in force as of July 2026

Kuwait and Qatar both signed the original GCC VAT Framework alongside the UAE, Saudi Arabia, Bahrain and Oman, which set a common standard rate of 5 percent among the six member states, as described in Baker McKenzie's GCC VAT Framework update. As of the July 2026 update, neither Kuwait nor Qatar had implemented a VAT law. We will not guess at a start date for either country: confirm directly with Kuwait's Ministry of Finance or Qatar's General Tax Authority before assuming any timeline.

Worth noting for anyone tracking the framework itself: amendments approved by Saudi Arabia under Council of Ministers Resolution No. 887 (19 May 2026) changed the GCC's common 5 percent rate from a fixed rate to a floor, giving member states more flexibility on how high they set their own standard rate. That is one more reason the rate in any single GCC state cannot be assumed from the others.

Why VAT has to be calculated per country and per line

A GCC group with entities in, say, the UAE and Saudi Arabia is not running one VAT regime with two currencies. It is running two separate VAT regimes, each with its own rate, its own registration threshold, its own return and its own authority. Saudi Arabia's 15 percent and the UAE's 5 percent sit on top of different exemption and zero-rating rules, so the correct rate for a given line item depends on where the supply is made, not just which entity raised the invoice.

This is also why VAT cannot be set at the invoice level. A single invoice can carry lines taxed at the standard rate, lines that are zero-rated, and lines that fall outside scope entirely, particularly for cross-border services between GCC entities. Getting this right means applying the correct country's rate to each line, not applying one rate to the whole document and hoping it holds.

Using a GCC VAT calculator

If you need a quick, country-specific figure rather than a full return, our GCC VAT calculator lets you switch between the UAE, Saudi Arabia, Bahrain and Oman rates covered above. For UAE-only calculations, the UAE VAT calculator applies the 5 percent rate directly. Neither tool replaces a filed return: use them to check a number, then confirm the final figure against your ledger before you file with the relevant authority.

For a longer walkthrough of UAE VAT mechanics, including registration, invoicing and return preparation, see our UAE VAT compliance guide.

Axion ERP's finance module applies the correct VAT rate per line for each GCC country you operate in, and prepares the VAT return figures for the UAE, Saudi Arabia, Bahrain and Oman ahead of filing. If your group also runs Arabic-English invoicing and multiple currencies across entities, our piece on bilingual, multi-currency ERP for the GCC covers why that matters beyond VAT alone.

Frequently asked questions

What is the standard VAT rate in Saudi Arabia in 2026?

Saudi Arabia's standard VAT rate has been 15 percent since 1 July 2020, up from an initial 5 percent, as confirmed by PwC's Worldwide Tax Summaries. ZATCA's May 2026 guideline confirms the registration thresholds alongside this rate.

Does Kuwait charge VAT in 2026?

No. As of the Baker McKenzie July 2026 update, Kuwait had not implemented a VAT law, even though it is a signatory to the original GCC VAT Framework. Confirm any change in status directly with Kuwait's Ministry of Finance.

What is the VAT registration threshold in Oman?

Oman's mandatory VAT registration threshold is OMR 38,500 in annual taxable supplies, set by a Tax Authority Chairman's Decision. Businesses below that figure are not required to register, though voluntary registration mechanics should be confirmed with the Tax Authority.

Do I need to register for VAT separately in each GCC country I trade in?

Yes. Each GCC state that has implemented VAT runs its own registration process with its own authority and its own threshold, so a UAE registration does not cover a Saudi, Bahraini or Omani entity.

What is the UAE's voluntary VAT registration threshold?

The UAE's Federal Tax Authority sets the voluntary VAT registration threshold at AED 187,500, half of the AED 375,000 mandatory threshold. Businesses below AED 187,500 in taxable supplies and imports fall outside the VAT system entirely.

Sources

Axion ERP brings finance, people, sales, commerce and supply chain into one system built for GCC compliance: VAT per country, ZATCA and UAE e-invoicing, WPS files, GOSI, gratuity, Arabic and English, unlimited users, priced per box. See the features and pricing pages, or contact us about a pilot.

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