Taxes

Previously, member countries of the Cooperation Council for the Arab States of the Gulf (GCC) were known as tax-free countries. However, this changed, primarily to reduce budget deficits due to subsidies and low crude oil prices.

In June 2016, the six GCC countries signed the Unified Agreement for Value Added Tax of the Cooperation Council for the Arab States of the Gulf. This contains the general principles and rules on the Value Added Tax (VAT) agreed at the GCC level. Under this agreement, the GCC countries pledged to introduce a 5% VAT rate.

Saudi Arabia introduced a 5% VAT on January 1, 2018, which was later raised to 15% in July 2020. As of July 2023, the VAT rate in Saudi Arabia remains at 15%.