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October 08, 2025

GCC Tax Updates – What UAE, Bahrain & KSA Businesses Need to Know (September 2025)

Tax compliance in the GCC is evolving rapidly. With new VAT, corporate tax, and e-invoicing updates across the UAE, Bahrain, and Saudi Arabia, businesses cannot afford to fall behind. At Nishe, we’ve distilled the latest developments into a practical guide to help you understand what’s changed, who it impacts, and what actions you need to take.

UAE Updates

  • FTA VATGIT1: Input Tax Apportionment Guide
    • Taxable persons in the UAE can apply to the FTA to use a specified recovery percentage based on the previous year’s calculated recovery rate, reducing the burden of recalculating the recovery ratio for every period.
    • Why it matters: If your business makes exempt supplies (like financial services or residential leases), you cannot claim VAT in full. Standard and special calculation methods apply, however, now you can request for a specified recovery rate. A significant development is new guidance on the Specified Recovery Percentage (SRP), effective 15 Nov 2024, allowing eligible businesses to use a fixed rate for input tax apportionment, simplifying compliance and reducing admin.
  • Corporate Tax Clarifications
    • CTP009: Clarifies valuation rules for real estate developers under transitional provisions. Developers must elect the method in their first tax return, with elections applying per property/project.
    • CTP008: Clarifies how family wealth structures (foundations, trusts, SPVs, family offices) are treated for corporate tax. Some may be transparent, others fully taxable, depending on their structure and regulation.
  • E-Invoicing Ministerial Decisions 243 & 244
    • Mandatory phased rollout of electronic invoicing for B2B and B2G transactions.
    • Large businesses (≥ AED 50m revenue): live by Jan 2027.
    • SMEs: live by July 2027.
    • Government entities: live by Oct 2027.
    • Businesses must appoint an Accredited Service Provider (ASP).
  • FTA VAT Group Turnover Declaration
    • New declaration letter format required for VAT groups.

 Bahrain Updates

  • VAT Registration Guide (v1.9): Enhanced instructions for portal registration, eligibility questionnaires, and VAT group rules.
  • VAT Transportation Guide (v1.2): Clarifies what qualifies as “means of transport” for zero-rated or exempt VAT treatment.

KSA Update

  • E-Invoicing – Wave 24: ZATCA announced criteria for taxpayers to integrate with Fatoora by June 30, 2026 (VAT revenues ≥ SAR 375,000 in 2022–2024).

Conclusion:
 Across the GCC, tax authorities are tightening compliance, enforcing digitalisation, and phasing in e-invoicing. Whether it’s VAT recovery in the UAE, VAT registration in Bahrain, or e-invoicing in KSA, businesses must act early.

At Nishe, we help companies interpret these changes, implement the right systems, and stay ahead of deadlines. Talk to us today about your compliance roadmap.

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