By Innovation-sa on November 8, 2017 in News
With only 52 days to go before the implementation of Value Added Tax (VAT) in Saudi Arabia, the General Authority of Zakat and Tax (GAZT) reminded businesses and companies to ensure that they are well-versed with the rules and regulations of VAT.
VAT will be implemented in the Kingdom on January 1, 2018. Rules and regulations related to VAT have been published in the tax’s official website, vat.gov.sa. It also provides tools to aid businesses to prepare for the application of VAT, along with visual aids, registration and VAT application information, and the list of goods and services subject to VAT.
According to the guidelines published in the website, a standard VAT rate of 5 percent will be charged at every level of the supply chain for majority of goods and services. It also specifies few goods and services that are zero percent rated, exempt and out of scope.
Distribution of medicine and medical equipment identified by the Ministry of Health and the Saudi Food and Drug authority, supply of gold and silver for investment such that they guarantee at least 99 percent purity and are tradable in the Global Bullion Market, and exporting goods outside of GCC region are all subjected to zero percent VAT according to the website.
The new regulations stated that financial services involving money or securities, providing credit or credit guarantee for customers, life insurance and reinsurance contracts, and renting of residential property are all exempted from VAT.
Government services like issuance and renewal of passports and driving licences are out of VAT’s scope.
Moreover, businesses implementing tax before the scheduled date will face serious consequences, reminded Abdulrahman Al-Hussain, spokesperson of the Ministry of Commerce and Investment.