Custodian of Two Holy Mosques King Salman of Saudia Arabia along with Council of Ministers came out with an agreement to levy Value Added Tax (VAT) and few taxes on GCC (Gulf Cooperation Council) States.
GCC is composed of Kuwait, Bahrain, Qatar, Oman, Saudi Arabia and the United Arab Emirates (UAE).
In Saudi Budget 2017 it was recommended that a 5% VAT will be charges without any changes in prices. All the six GCC countries have agreed to the implementation of Value Added Tax (VAT) and selective taxes for Energy Drinks, Soft Drinks and Tobacoo this year.
Earlier there was no VAT system at all in Saudi Arabia, but 2018 will be the year VAT Taxes will be applied in Saudi.
Introduction of a VAT in the kingdom will be one measure to strengthen the indirect tax structure.
You can red more details on How does VAT work in Saudi Arabia.
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