E-commerce business subject to VAT in Saudi Arabia

Updated 13 December 2017
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E-commerce business subject to VAT in Saudi Arabia

RIYADH: The General Authority of Zakat and Tax (GAZT) announced that electronic sales and purchases are subject to the value added tax (VAT) of 5 percent, and that Customs will collect it when goods enter the Kingdom through border crossing points.

GAZT affirmed that VAT will be applied to goods imported from the GCC countries as a temporary measure until activation of the electronic service system between the GCC countries.

Electronic services such as software, e-subscriptions, mobile applications, and digital content will be governed by special laws that determine how the VAT is applied to them.

GAZT stated that if the supply is a service from outside the Kingdom, the recipient in the Kingdom must calculate the tax according to the reverse charge mechanism, if he subject to paying taxes.

The reverse charge is defined as a mechanism by which the recipients of taxable services calculate the VAT payable instead of the non-resident supplier.

GAZT said that if the service recipient is the final consumer, the non-resident service provider must register in the Kingdom for VAT purposes, regardless of the volume of its supply.

In cases where electronic services are provided via electronic platforms acting as intermediaries for non-resident suppliers, these platforms will be responsible for the calculation of the tax value, rather than on behalf of non-resident suppliers.

GAZT called on all qualified entities to be fully prepared to apply the tax on January 1, 2018 and to access www.vat.gov.sa/ar. The website contains a “guide” that provides a simplified explanation of the basic concepts that enterprises need to apply for the value added tax, as well as a wide range of tools and information that serve as a reference for enterprises to achieve their readiness.

GAZT has called on enterprises with annual revenues exceeding SR1,000,000 ($266,630) to register for the VAT before December 20, 2017, in order to avoid fines and suspension of many government services.


World applauds as Saudi women take the wheel

A Saudi woman and her friends celebrate her first time driving on a main street of Alkhobar city in eastern Saudi Arabia on her way to Bahrain on June 24, 2018. (AFP / HUSSAIN RADWAN)
Updated 25 June 2018
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World applauds as Saudi women take the wheel

  • As the de facto ban on women driving ended after more than 60 years, women across the Kingdom flooded social media with videos of their first car trips
  • The celebrations even reached as far as France, where Aseel Al-Hamad, the first female member of the Saudi national motorsport federation, drove a Formula 1 racing car in a special parade before the French Grand Prix at Le Castellet 

JEDDAH: The world awoke on Sunday to images and video footage many thought they would never see — newly empowered Saudi women taking the wheel and driving their cars.

As the de facto ban on women driving ended after more than 60 years, women across the Kingdom flooded social media with videos of their first car trips, while some police officers among the large number out on the streets distributed roses to the first-time drivers.

The celebrations even reached as far as France, where Aseel Al-Hamad, the first female member of the Saudi national motorsport federation, drove a Formula 1 racing car in a special parade before the French Grand Prix at Le Castellet.

“I hope doing so on the day when women can drive on the roads in the Kingdom of Saudi Arabia shows what you can do if you have the passion and the spirit to dream,” she said.

In a tribute to Saudi female drivers, the Lebanese soprano Hiba Tawaji released a special video of a song she performed live in Riyadh at a concert last December “Today women in Saudi Arabia can legally drive their cars,” she said. “Congratulations on this achievement, this one’s for you!”

Back home in Saudi Arabia, the atmosphere was euphoric. “It’s a beautiful day,” businesswoman Samah Algosaibi said as she cruised around the city of Alkhobar. 

“Today we are here,” she said from the driver’s seat. “Yesterday we sat there,” she said, pointing to the back.

“I feel proud, I feel dignified and I feel liberated,” said Saudi Shoura Council member Lina Almaeena, one of the first women to drive in the Kingdom.

She told Arab News that the event was changing her life by “facilitating it, making it more comfortable, making it more pleasant, and making it more stress-free.”

Almaeena urged all drivers to follow the traffic and road safety rules. “What’s making me anxious is the misconduct of a lot of the drivers, the male drivers. Unfortunately they’re not as disciplined as they should be. Simple things such as changing lanes and using your signals — this is making me anxious.

“But I’m confident: I’ve driven all around the world when I travel, especially when I’m familiar with the area. It’s really mainly how to be a defensive driver because you have to be.”