VAT Sin Tax on Expats and Saudi Citizens
VAT implementation in Saudi Arabia starting from 2020, there are regulations and laws for VAT implementation in KSA. Value Added Tax is starting from Jan-2018 not just in Saudi Arabia but Six GCC states in the Globe and these are Saudi Arabia, Kuwait, Bahrain, Oman, UAE, and Qatar.
They will start introducing Tax VAT (Value Added Tax) on 1st-Jan 2018. There is a big purpose behind this, which is to stop smuggling and other same problems. Tax [VAT] will be implemented in all these GCC states mentioned above. Update: Now the VAT is 15% in KSA.
The VAT is an extra charge on Sales of products and related services in a country to Gov. Sin Taxes are extra charges on harmful product sales like for example tobacco, gambling, etc. It’s happening for the very first time in history in GCC States/countries that VAT is implementing in these states. Everything is excluded but the followings are not:
VAT Won’t be Applicable on:
- Education Sytems
- Health Cares
- 95 less or above food items
- Social Services
- Staple food too.
Sin tax has been successfully implemented in KSA in June-2017 by King Salman and Finance minister Ibrahim Al Assaf. Shoura Council has approved VAT implementations. These GCC gulf states will have the benefit of these taxes and will be an alternative source of income for them. You might be aware of this or not that Private Sectors are getting prepared to comply with VAT implementations.