No VAT on expat remittances in Saudi Arabia, say bankers

Updated 18 December 2017
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No VAT on expat remittances in Saudi Arabia, say bankers

RIYADH: Senior bankers clarified on Sunday that money sent home by expatriate workers will not be taxed under the value-added tax (VAT) reform initiative to be launched by the Saudi government on Jan. 1 next year.
It was also announced that companies and businesses have only three days left to register and obtain their dedicated VAT account numbers.
Saudi Arabia’s General Authority for Zakat and Income Tax (GAZT) has urged businesses with annual revenues of more than SR1 million ($266,640) to register for VAT before the deadline of Dec. 20, 2017.
“The deadlines for companies with annual revenues between SR1 million and SR375,000, however, has been extended by a year until Dec. 20, 2018,” according to a GAZT statement.
“All businesses including commercial organizations and banks have been advised to make sure they understand the VAT rules and be ready for their implementation after 15 days from now,” said Syed Ahmed Ziauddin, a senior banker who heads the financial institutions and public sector group at Bank Al-Jazirah in Riyadh.
He said: “Aljazirah Bank is fully ready to start from Jan. 1 ... and we are going to apply VAT on our service charges.”
He said that all commercial banks have geared themselves to comply with the VAT regulations. “The banks have also educated their customers about VAT besides advising them about various services that will come under the purview of VAT,” said Ziauddin, while adding that the remittances will not be taxed under the VAT system.
“Money remittance outflows will be exempted,” said Abdullah Ali Nasser Alfuraiji, chief of the Tahweel Al-Rajhi in Riyadh. Alfuraiji made it clear that “the 5 percent VAT tax would be levied on the remittance service fees, rather than the remittances themselves.
He emphasized that “Tahweel will be charging 5 percent of SR18, which we charge as remittance fee for sending funds to India. Hence, the rise will be nominal with customers required to pay 9 halalas extra for remitting money to India.”
The Tahweel chief added that this will be negligible, but will differ from country to country.
Referring to the implementation of the VAT and the levies imposed on remittances, Ahmed Mohammed Al Enazi, general manager of Enjaz Banking Services, the remittance arm of Bank Albilad, said: “There will not be any impact on remittances.” He also confirmed that “5 percent VAT will be imposed on service charges... say like 5 percent of SR16 in case of India and 5 percent of SR20 in case of Pakistan.”
“The 5 percent on banks’ service fees will be paid by the person sending money as per guidelines of the General Authority of Zakat and Tax (GAZT),” said Ahmed.
Banks and remittance centers in the Kingdom charge varying fees on remittances sent to different Asian and European countries.
The imposition of 5 percent VAT “on service charges, not on remittance amounts” was also confirmed by Anwar Ahmed Wajid Khajja, manager of products and partners at Fawri, the remittance wing of Bank Aljazirah in Riyadh.
Referring to the benefits of VAT especially those collected by banks and remittance centers, Cenon Nonie C. Sagadal Jr., marketing representative of Rizal Commercial Banking Corporation (RCBC) of the Philippines, said: “VAT is a welcome move with a slight increase in remittance fees, which will eventually benefit the remitters and the institutions.
“With the government meeting its financial goals as a result of VAT collection, more employment opportunities will be created not only for Saudis but also for expatriates within the framework of the Saudi Vision 2030.”


World’s leading young violinist to give two concerts in Saudi Arabia

Updated 18 July 2018
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World’s leading young violinist to give two concerts in Saudi Arabia

  • The performances will take place on July 21 at King Fahd Cultural Center in Riyadh and at Dar Al-Hekma University in Jeddah on July 23
  • Chloe Chua of Singapore will be accompanied at the Riyadh concert by pianist Gordon Back, artistic director of the Menuhin competition

JEDDAH: Chloe Chua, junior winner of this year’s world-renowned Menuhin competition, is to perform in Riyadh and Jeddah.

The performances, organized by the General Authority for Culture (GAC) in Saudi Arabia, will take place on Saturday, July 21 at King Fahd Cultural Center in Riyadh, while Dar Al-Hekma University in Jeddah will host the second concert on Monday, July 23 when Saudi pianist Eman Gusti will also perform.

Chua, the 11-year-old from Singapore, won the competition, considered a major international contest for young violinists.

Her talent began to be recognized when at the age of four she joined the Nanyang Academy of Fine Arts in Singapore. She also came first in the Andrea Postacchini International Violin Competition last year.

She will be accompanied at the Riyadh concert by pianist Gordon Back, artistic director of the Menuhin competition.

Back is a key contributor to major international violin competitions including the Queen Elizabeth in Brussels, the Carl Flesch in London, the International Tchaikovsky Competition in Moscow, the International Violin Competition of Indianapolis in the US, and the Menuhin Competition in the UK. 

His recordings include Bach and Schumann sonatas for violin and piano with French violinist Jean-Jacques Kantorow, a series with British clarinetist Emma Johnson, and in 2011 he recorded all of 19th-century Moravian composer Heinrich Wilhelm Ernst’s works with Czech violinist Josef Spacek.

The fact that these two concerts have been organized displays the GAC’s commitment to featuring internationally renowned artists in the Kingdom. This type of event raises awareness of classical music, and is part of the GAC’s drive to provide diverse artistic experiences to audiences in the Kingdom.