Lease, Ijara contracts signed before Jan 1 exempt from VAT

04/01/2018 Argaam

 

Saudi General Authority for Zakat and Tax (GAZT) said financing lease and rent-to-own (Ijara) contracts signed before Jan. 1, will be exempt from newly introduced value-added tax (VAT).

 

The same contracts signed Jan. 1 onward will be liable to the five percent tax, which will be levied on asset’s initial value, excluding profit and interest.

 

The government exempted a range of financial services from the tax including loan interests, lending fees, stock and bond sales and bank accounts, data compiled by Argaam showed.

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