Explore why the UAE started VAT! Get all the details you need to understand this important economic change in the Emirates. In 2018, the United Arab Emirates (UAE) implemented Value Added Tax (VAT). This was done in order to diversify its economy away from being heavily dependent on oil production. The UAE is part of the Gulf Cooperation Council (GCC), which is a regional free trade agreement between six countries in the Middle East. The implementation of VAT across the GCC was an important step towards creating a more unified and competitive economy.