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Saudi Arabia's General Authority for Zakat and Tax (GAZT) will begin imposing monthly value-added tax on all facilities and institutions--including groceries, motor oil shops and small enterprises--with revenues exceeding SAR 375,000, starting from January 2018, Okaz newspaper reported on Monday.
All companies will be responsible for collecting and paying taxes to GAZT, Musfir Al-Duhaim, head of indirect tax team at GAZT, said.
They are also requested to register their data starting from Q4-2017.
“VAT is the lowest tax worldwide, as that standard rate was set at 5 percent. It can also be reclaimed on inputs,” Al-Duhaim said, adding that loss-making firms will not be exempt from VAT.
Late in January, the Saudi cabinet gave its final approval for a region-wide VAT which will be implemented in the GCC from next year, Argaam earlier reported.
A VAT of 5 percent will be imposed select goods following the agreement introduced last June. This includes tobacco products, as well as energy drinks, while a 50 percent tax will be applied to soft drinks.
Certain items like healthcare and food are anticipated to be exempt from the tax.
Each member state is expected to issue its own national VAT legislation based on the agreed common principles.
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