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SAUDI ARABIA: 5% VAT Now Payable on Goods and Services

VAT of 5% is now payable on all goods/services in Saudi Arabia, except some specified exemptions. Among the products/services deemed to be exempt (or zero-rated) are medicines and certain high-purity precious metals.

The new levy, which came into effect as of 1 January this year, sees the country alongside the UAE complying with an earlier Gulf Cooperation Council (GCC) resolution to adopt a uniform 5% VAT rate across the region.

As of 20 December 2017, more than 80,000 companies with an annual turnover in excess of Saudi Arabian Riyal (SAR) 1 million (US$266,490) had registered for the new levy. Businesses with an annual turnover of between SAR 375,000 and SAR 1 million now have until 20 December 2018 to register, while any business that falls below this threshold is not obliged to register.

A complete list of the goods/services subject to/exempt from VAT can be accessed here. For further details, see UAE: Online Registration for Incoming VAT to Commence from Mid-September.

Content provided by Picture: HKTDC Research
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