VAT

Destination Applied VAT

Value Added Tax (“VAT”) is an indirect tax on the consumption or use of goods and services and is applicable in the Kingdom of Bahrain effective January 1, 2019 and in Saudi Arabia and United Arab Emirates effective 1 January 2018 at a standard rate of 5%.

VAT is charged at each step of the supply chain. Ultimate consumers generally bear the VAT cost while businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government.

• Domestic deliveries in UAE and KSA:

Pick-up and delivery of shipments is within the Country, all charges related to the domestic delivery will be subject to 5% VAT and Aramex will charge you VAT in addition to the shipping charges.

For example: If shipping charges are AED 50, VAT@5% will apply on AED 50 and the price including VAT will be AED 52.5 (50*5%=2.5 being the VAT)

• Taxable goods imported into UAE and KSA:

VAT, as a general consumption tax, will apply at 5% to all transactions of goods and services unless specifically exempted in Article (46) of the Federal Decree-Law No. (8) of 2017 on Value Added Tax or subject to a rate of Zero as per Article (45) of the Federal Decree-Law.

Import VAT is applicable on all taxable goods imported into UAE and KSA. As per the guidelines issued by the Federal Tax Authority, Import VAT is chargeable on the total value of goods (which may include insurance, freight) and on Customs Duties (if applicable) and Excise Tax (if applicable).

• Taxable goods imported into Bahrain:

VAT, as a general consumption tax, will apply at 5% to all transactions of goods and services unless specifically exempted or subject to a zero-rate VAT.

International and domestic transportation is zero-rated as per the published VAT Law and Regulations in Bahrain. Accordingly, no VAT will be charged on the shipping fee, subject to any changes or clarifications in the current VAT Law and Regulations.

References:

• Bahrain VAT Law: https://www.nbt.gov.bh/pdf/81129_law_english_translation.pdf
• Bahrain VAT Regulations: https://www.nbt.gov.bh/pdf/20181219_bah_bilingual.pdf
• Bahrain VAT FAQs: https://www.nbt.gov.bh/what_is_vat
• GCC VAT agreement:  http://www.legalaffairs.gov.bh/Media/LegalPDF/L4718.pdf
• GCC VAT agreement :  https://tax.gov.ae/pdf/GCC-VAT-Agreement.pdf
• KSA VAT Law: https://www.vat.gov.sa/sites/default/files/2017-09/SaudiVATlaw-bilingual.pdf
• KSA VAT Regulations: https://www.vat.gov.sa/sites/default/files/Value-Added-Tax-Approved-Implementing-Regulations-Bilingual.pdf
• KSA VAT FAQs: https://www.vat.gov.sa/en/introduction-to-vat/faq/general-faqs
• https://www.vat.gov.sa/en/introduction-to-vat-teh/faq/technical-faqs
• UAE VAT Law: https://tax.gov.ae/pdf/Federal-Law-No-8-of-2017.pdf
• UAE VAT Regulations: https://www.tax.gov.ae/pdf/Cabinet-Decision-No-52-of-2017.pdf
• UAE VAT FAQs: https://www.tax.gov.ae/faq.aspx