Saudi Arabia increases VAT to 15 percent today


A new Value Added Tax (VAT) regime of 15 percent comes into effect in Saudi Arabia from today.

The rate was 5 percent before today’s increase.

The Kingdom’s decision to triple VAT was announced on May 11, as part of a new set of measures to mitigate the impact of the coronavirus pandemic on the economy.

Saudi Arabia’s General Authority of Zakat and Tax (GAZT) explained that the new rate will be applicable to food and beverages, domestic transportation and commercial sale and rent of real estate.

Other vatable items are residential sale of real estate, rent in hotels, inns, guest houses, motels and serviced accommodation, private education, private health care, and domestic oil, oil derivatives and gas sector.

Items exempted from VAT are: Medical equipment and medicines on the list issued by the Ministry of Health and the Food and Drug General Authority, health care in public health centres, governmental services such as renewing a passport or a driver’s licence, and supplies of investments in gold, platinum and silver, given that their purity level is no less than 99 percent and they can be traded in global markets.

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