Saudi Arabia imposes 15% VAT on goods
Friday, 07 03 2020, Category: Economy, Country: Saudi Arabia
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.