Tourists to get VAT refund on purchases in Saudi Arabia

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Tourists to get VAT refund on purchases in Saudi Arabia

A mechanism to return the VAT to tourists is under process and thus it will not be applicable at the start of 2018

By Web Report

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Published: Thu 28 Dec 2017, 9:07 AM

Last updated: Sun 16 Feb 2020, 10:03 PM

Currently, the value-added tax (VAT) is the crux of every conversation among UAE residents and tourists alike. 
However, the silver lining for the tourists travelling to the Kingdom of Saudi Arabia is they may get a refund on VAT on purchases made whilst their stay in the Kingdom.
On December 24 the General Authority of Zakat and Tax (GAZT) announced that a mechanism to return the VAT to tourists is under process and thus it will not be applicable at the start of 2018.
Talking on the issue, Hamoud Al-Harbi, director of VAT operations center at GAZT, told Arab News, "Tourists may get VAT refund on the items purchased from here but after a mechanism has been decided upon regarding on the process of refund, rules of purchases and payments, and the minimum amount of purchase."
Also, expats living in Gulf Cooperation Council (GCC) countries will not fall under the VAT return system and all tourists travelling to the Kingdom will have to submit an application in order to get refunds on VAT and will need to provide proof of VAT payment and purchases made.
Value-Added Tax or VAT is a form of indirect tax on the consumption or use of goods and services levied at the point of sale. It is in place in more than 180 countries around the world as a general consumption tax.
In Saudi Arabia VAT will come into effect from January 1, 2018, at a rate of 5 per cent on majority of transactions in goods and services with a limited number of exemptions may be granted. 



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