Saudi Arabia to impose VAT on govt projects

Saudi Arabia will impose value-added tax (VAT) on government projects being developed by the private sector companies, Al Watan newspaper reported, citing Hamoud Al Harbi, director of the VAT project in the General Authority of Zakat and Tax (GAZT).

Private sector firms contracted by the government should register for VAT and submit the relevant documents, he added.

All contracting and subcontracting services provided in the Kingdom either for residential or commercial construction projects will be subject to the VAT, Al Harbi said.

The Kingdom is set to introduce 5 percent VAT from Jan. 1, 2018.