Medicine, medical equipment and certain precious metals will be exempt from the new 5 percent tax to be introduced in Saudi Arabia from 1 January 2018, a tweet by the General Authority of Zakat and Tax said.
Medicines, medical machinery, and 99 percent pure gold, silver and platinum imports for investment were among a list of products that won’t be subject to the new tax.
The new VAT will also not be levied on house rent and government services such as passport and driving license issuance and renewal fees, the authority said.
The twitter account of the new tax authority released the list of exempt items and services ahead of the implementation of VAT.
According to the new law, the following services will remain tax-free: exports to countries outside the Gulf Cooperation Council, services to non-residents in the GCC, international transport services for goods and passengers, the import, spare parts of means of international transport and their maintenance, repair and modification.
VAT will also not be applied to certain financial services such as the issuing, transfer or trade in currency or financial securities, provision of credit guarantee to clients and life insurance policies.
In most cases the nature of economic activities and their revenue streams will determine whether VAT will apply, according to an Aug. 2017 advisory paper by global accounting firm Deloitte.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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