VAT won’t apply on residential rentals, government services: GAZT

Saudi Arabia’s General Authority of Zakat and Tax (GAZT) said that the value added tax (VAT) will not be applied on residential rentals and government services, such as issuing a passport or driving license.

A five percent tax is set to be levied in 2018 on the end consumer for select goods and services.

Over 55,000 businesses across the Kingdom have already registered for VAT, GAZT said in September.

Small businesses with annual income of less than SAR 1 million will be given a grace period for VAT registration until Dec. 20, 2018, Saudi Press Agency (SPA) reported.

Under the Unified Agreement on VAT, entities with annual income above SAR 375,000 will be required to register for VAT while registration will be optional for entities with annual income between SAR 187,500 and SAR 375,000 and they will be allowed refund of the taxes.

Entities with annual income less than SAR 187,500 are exempt from VAT, GAZT added.