VAT is tax, charged by the government, on the consumption of goods and services. As an indirect tax on the consumption of goods and services. VAT is borne by end consumers and collected incrementally at each stage of a business's supply chain on behalf of the government.
Vat has been set at a standard 5% across GCC countries and has come into effect from 1 January 2018 in the United Arab Emirates and United Kingdom of Saudi Arabia with Bahrain implementing for the first time from 1 January 2019. It is mandatory to register as a VAT vendor if your business has an annual taxable turnover of SAR 375,000 or more (or the equivalent in other GCC states). A failure to comply with this legislation can lead to penalties and/or prosecution.