We are asked repeatedly what the VAT position will be post the UK existing the EU. The short answer is that no real guidance has been published as yet so it is a relative unknown. The reality is that it is highly unlikely that VAT in the UK will be subject to major changes in the initial post Brexit phase as it is such a money earner for the UK government. Although VAT is an EC concept and tax, many non EC countries have adopted their own version which is often a mirror image of EC VAT, with local differences that reflect the country implementing a VAT regimes own concerns. In fact in the case of Australia GST was advised on and implemented primarily with the aid of UK VAT consultants.The latest block of countries in the process of adopting a VAT regime are the Gulf States. Members of the Gulf Cooperating Council, Saudi Arabia, Bahrain, Qatar, Oman, UAE and Kuwait, have announced the legislation that is being implemented in member countries with effect from 1 January 2018. There is a minimum registration threshold that will apply with a standard VAT rate of 5- applying to most goods and services. Like the UK and the EC, there will be exemptions for health, education, certain financial services, public transport and transport services and a zero rate for some foods. The main differences to UK and EC VAT at present appear to be a zero rate for oil-related supplies, reflecting the GCC's main economic activity.The main issue for businesses trading in or with GCC countries going forward will be ensuring that they understand and implement VAT correctly and anticipate its effect in advance of entering into agreements or making supplies. At The VAT People Limited we are well versed in understanding UK and EC legislation and are also in a position to consider the likely impact of VAT on supplies made to or in the GCC states. If you require further advice please contact our helpline for an initial free consultation.
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