Certain medicines, medical equipment exempted from VAT in Saudi Arabia

Updated 10 December 2017
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Certain medicines, medical equipment exempted from VAT in Saudi Arabia

JEDDAH: The 5 percent value-added tax (plan) will not be imposed on certain medicines and medical equipment, according to Reuters citing a statement carried by Saudi Press Agency (SPA) on Saturday.
All other private health care services will be taxed at the standard rate, the statement said, citing directives issued by the General Authority of Zakat and Tax (GAZT), the Ministry of Health and the General Authority for Food and Drug Affairs.
Last week, the tax authority had confirmed that interest or lending fees charged with an implicit margin for finance will be exempt from value-added tax (VAT).
GAZT officials, at a workshop held in Jeddah for members of the local media, also quashed rumors about ATM withdrawals and clarified that customers would not be charged for withdrawing or transferring money from their accounts using ATMs.
However, the 5-percent tax will be imposed on banks’ administrative charges such as the issuance of checkbooks, statements of accounts and safety deposit boxes and the customer will have to bear this expense.
In a bid to facilitate businesses, the authority also announced that the first year after VAT launch will be a transitional period. Goods and services supplied under certain long-term contracts will be zero-rated during that period provided the existing contracts meet certain requirements. This will enable suppliers and customers, who had entered into long-term contractual commitments, to re-negotiate the contracts’ details, particularly details that will be affected by VAT implementation.
GAZT clarified that this treatment only applied to contracts that did not anticipate VAT. Contracts that contain tax-related provisions or mechanisms to adjust prices of goods and services and include VAT will not be included.
Saudi Arabia and the UAE are expected to be the first Arabian Gulf countries to introduce the GCC-wide VAT on Jan. 1, 2018, while other member states have committed to implementing their own VAT taxation by next year.
Gulf states have been looking at other ways to reduce dependency on oil revenues, as well as create new income streams to fund government services including public health services, public owned or funded schools, parks and transport infrastructure.
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. The International Monetary Fund (IMF) has said the returns could reach around 2 percent of region’s output.
The GAZT has urged businesses with annual revenues of more than SR1 million ($266,640) to expedite their VAT registration process and ensure their readiness for its implementation.


New technologies help increase number of flights, passengers in Saudi Arabia’s airports — GACA

Updated 24 March 2019
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New technologies help increase number of flights, passengers in Saudi Arabia’s airports — GACA

  • More than 99.86 million passengers departed or arrived through 771,828 flights in the Kingdom's international and domestic airports in 2018
  • GACA is due to host Global Aviation Summit 2019 on April 1 and 2 in Riyadh

JEDDAH: New technologies applied in Saudi Arabia's airports has contributed to aviation growth in the Kingdom and has provided solutions for passenger’s trips, air cargo and investments, the General Authority of Civil Aviation (GACA) has said.

GACA earlier reported an 8 percent increase in passenger numbers and 4 percent in flight rates in 2018.

It said more than 99.86 million passengers departed or arrived through 771,828 flights in the Kingdom's international and domestic airports in 2018, compared to 92.42 million passengers on board 741,293 flights in 2017.

"The GACA is keen to adopt plans to develop the Kingdom's airports network in order to keep pace with the steady increase in air traffic, increase the reliability of services, maximize geographic coverage and enhance the contribution of the airports to the overall economic growth of the country," it said.

For example, it said, GACA provides information through technology to reduce paperwork, operating costs and streamline business processes while reducing time to address them.

Most prominent among these e-services is the “Self-Services at the Kingdom's airports” that include check-in kiosks that provide boarding passes and luggage identification cards and self-service baggage drops that allows passengers to self-check their luggage.

It also provides self-scanning devices for bags in the arrival halls, ensuring that all baggage and other cargo arrive at the airport through the installation of electronic gates for the passage of freight vehicles before being emptied into the luggage compartment. 

Electronic gates and document scanning machines ensure that a traveler's information is correct and that boarding passes, passports, national identity and residency are valid.

Other services include airport operations systems and flight information display for some domestic airports.

To ensure accuracy in the flight schedules, GACA said it is working on a project to link the Saudi Arabian Airlines traffic management system to the Airport Management System, of which 50 percent has been completed.

GACA is due to host Global Aviation Summit 2019 on April 1 and 2 in Riyadh to review the infrastructure projects for airports and smart airports, the available opportunities to operate the airports and provide advanced services and consultations in civil aviation, among others.