Following the signature of a regional framework agreement last year between the nations of the Gulf Cooperation Council, Saudi Arabia has recently confirmed that it will introduce a value added tax on certain good and services with effect from 1 January 2018.
This is relevant to any foreign brand doing business in the GCC, as the new tax will apply to a number of consumer facing good and services and consequently it will impact upon a business' bottom line.
Earlier this month, the Saudi Arabian Government approved the Unified Agreement for Value Added Tax ("Unified Agreement").
The Unified Agreement is an overarching agreement that will be concluded by all six nations in the Gulf Cooperation Council ("GCC").
The purpose of the Unified Agreement is to ensure that VAT will be introduced across the GCC nations in a consistent and coordinated manner, although it does not mean that each jurisdiction will have an identical law to govern the application and collection of VAT.