VAT will not be applied on housing rents or governmental services in Saudi Arabia, offcials confirmed.
The decision was confirmed via Saudi Arabia’s official VAT twitter account, which said some of the governmental services exempt from VAT will include passport and driver’s licence renewals.
The kingdom will introduce a 5% VAT from January 1, 2018 as part of the Unified Agreement for VAT of the Cooperation Council for the Arab States of the Gulf, which was signed by the six GCC member states.
The ‘Saudi VAT’ twitter account was created in May 2017 to raise awareness of the rules and application of the new tax.
An earlier tweet on the social media micro-blogging site on October 12 said that VAT will not be levied on salaries, only on goods and services.
In addition, the tax will not be applied to Islamic or commercial financial services, equipment for the disabled, personal gifts carried in travel luggage, a document released by the Saudi Press Agency on October 15 said.
According to the document the Saudi tax authority have opened a VAT registration portal where tax-payers are required to register by December 20, 2017.
Some large companies, such as those already registered for other Saudi Arabian tax purposes, will be automatically registered for VAT by GAZT and notified by e-mail, the document says.
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