Saudi VAT enforcement: 55 days to go as businesses urged to follow new rules

Updated 05 November 2017
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Saudi VAT enforcement: 55 days to go as businesses urged to follow new rules

JEDDAH: All businesses have been advised to make sure they understand the new rules on value-added tax (VAT) and be ready for their application on Jan. 1, 2018, which is in 55 days.
The General Authority of Zakat & Tax (GAZT) has urged businesses to read the regulations which can be found on the tax’s official website.
According to the rules approved by GAZT’s board, a 5 percent VAT will be imposed on most goods and services at each stage of the supply chain from production and distribution to the final sale.
The regulations also defined the goods and services that will be exempt, zero-rated and out of scope.
Activities subjected to a zero percent VAT include the supply of medicines and medical equipment specified by the Ministry of Health and the Saudi Food and Drug Authority, the supply of gold and silver for investment purposes provided they are at least 99 percent pure and tradable in the Global Bullion Market, and the export of goods to outside the Gulf Cooperation Council (GCC) region.
Goods and services exempt from VAT, according to the new rules, include financial services such as dealing in money or securities, providing credit or credit guarantee for customers, and life insurance and reinsurance contracts. The renting of residential property is also exempt from VAT.
Services provided by government agencies as public authorities, such as the issuance and renewal of passports and driving licenses, will be out of the tax’s scope.
The VAT official website (vat.gov.sa) provides tools and information that support businesses and help them prepare for the application of VAT, in addition to visual aids, registration and VAT application information, and the list of goods and services subject to VAT.
The move is in line with an International Monetary Fund (IMF) recommendation for Gulf states to impose revenue-raising measures including excise and value-added taxes to help their adjustment to lower crude oil prices, which have slowed regional growth.
It is estimated that the VAT’s imposition will raise between $7 billion and $21 billion annually — or between 0.5 percent and 1.5 percent of regional GDP (gross domestic product).
Speculations surfaced in social media about a delay in the implementation process, but Rashid Al-Fowzan head of CNBC-Arabia TV channel, has made it clear that the VAT implementation will go as planned on Jan. 1, 2018.
Abdulrahman Al-Hussain, spokesperson of the Ministry of Commerce and Investment, has warned businesses against implementing the tax before the scheduled date. He threatened them with serious consequences following concerns raised by a section of the public.


Riyadh Art will transform capital into open art exhibition

Updated 11 min 50 sec ago
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Riyadh Art will transform capital into open art exhibition

RIYADH: Minister of Culture Prince Badr bin Abdullah bin Farhan thanked King Salman and Crown Prince Mohammed bin Salman on Thursday, for the launch of several projects aimed at improving the quality of life in the Kingdom, including Riyadh Art — a project that will reportedly involve the world’s largest government investment in public art.
Prince Badr said in a statement that Riyadh Art, through the implementation of more than 1,000 works of art, will transform the capital city into “an open art exhibition” reflecting the spirit of Saudi Arabian traditions in a modern way.
By bringing together artists and specialists from across the world, he added, the Kingdom will reap intangible returns, including intellectual and aesthetic enrichment.