IP Snippets

SAUDI ARABIA: VAT Increase Effective July 1

Published: June 15, 2020

Zeina Salameh Saba Intellectual Property

Verifier

Yassin Ghanim Al Hadaf Marks Services LLC Riyadh, Saudi Arabia

Pursuant to a Ministerial Decision published in the Official Gazette on May 15, 2020, the value-added tax (VAT) rate in Saudi Arabia will increase to 15 percent from the current rate of 5 percent effective July 1, 2020. This comes after the release of the VAT Regulations in the country on August 29, 2017, and the publication of the VAT Law in July of the same year.

The VAT Regulations, the VAT Law, and the finalized Gulf Cooperation Council (GCC) Framework Agreement form the entire foundation for the introduction of VAT across all sectors. By way of background, each member state of the GCC is expected to establish its own separate national legislation concerning the VAT. The detailed compliance requirements and set of rules will be outlined in the respective legislation. The United Arab Emirates, Bahrain, and Saudi Arabia are the only GCC countries that have introduced VAT so far.

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