Saudi Arabia imposes 15% VAT on goods as of today

01/07/2020 Argaam

 

Saudi Arabia starts today, July 1, 2020, increasing the value-added tax (VAT) from 5% to 15%.

 

The Kingdom implemented a 5% VAT on goods and services as of Jan. 1, 2018.

 

Saudi Arabia took a number of precautionary measures to mitigate the impact of the COVID-19 outbreak on the local economy, and to shore up state finances, including raising VAT.

 

The revised higher VAT of 15% in Saudi Arabia is still lower than the applicable tax rate in the global peer economies, and less than the VAT global average.

 

The revised higher VAT rates will be applicable to all stages of supply chain, including production, distribution, in addition to the final stage of selling commodities or services.

 

The General Authority of Zakat and Tax (GAZT) earlier said that the zero-rated and exempt goods and services will not be impacted by the new VAT.

 

GAZT amended the executive regulations of the VAT to exclude the value of supplying capital assets from the total value of annual supplies subject to VAT, provided that a capital asset should be utilized in boosting the economic activity.

 

The capital asset should not be held for rent revenues. This exception is not applicable to natural persons.

 

For tax invoices, GAZT explained that before May 11, 2020, a 5% VAT will apply to supply contracts, provided that goods will be already supplied ahead of June 30, 2021.

 

From May 11 to June 30, 2020, a 5% VAT will apply, in case goods are already supplied before the end of June, 2020, while a 15% VAT will apply if goods are supplied on or after July 1, 2020.

 

For the contracts made between VAT-registered institutions and government entities, a 5% VAT will apply before May 11 to existing contracts until the date of termination, renewal or until June 30, 2021.

 

For the period from May 11 to June 30, 2020, a 5% VAT will apply if goods are already supplied before the end of June 2020, but a 15% VAT will apply to supplies as of July 1, 2020.

 

For the contracts concluded between two VAT-registered entities, a 5% VAT will apply before May 11 to existing contracts until the date of termination, renewal or until June 30, 2021.

 

For the period from May 11 to June 30, 2020, a 5% VAT will apply if goods are already supplied before the end of June 2020, while a 15% VAT will apply to supplies as of July 1, 2020.

Comments {{getCommentCount()}}

Be the first to comment

loader Train
Sorry: the validity period has ended to comment on this news
Opinions expressed in the comments section do not reflect the views of Argaam. Abusive comments of any kind will be removed. Political or religious commentary will not be tolerated.