NO VAT ON EMPLOYEES SALARIES 

As VAT (Value Added Tax) of 5% is about to effect from January 1st 2018 in Saudi Arabia and GCC states, Many people are still confused on which things they are going to pay five percent of Value Added Tax.




Saudi Arabian authorities denied the rumors of VAT Tax on employees salaries, Value Added Tax will be applicable on merchandise and services and on all stages of import and export operations till the goods reach the customer, not on employees salaries whether they are expatriates or citizens.

- Value Added Tax (VAT) is an indirect tax applicable on all goods and services that are bought and sold by businesses, GCC states never taxed before as it was dependent on oil income, Due to fall in oil prices GCC states decides to impose VAT starting from 1st January 2018.




- More than 160 countries around the world has VAT as their most reliable source of revenue for government and state budgets, VAT will add 25 to 30 Billion Saudi Riyals on state budgets as per the estimation.

- All the businesses and companies in Saudi Arabia should comply with the rules and regulations of VAT, They need to streamline their accounting in order to accomodate VAT framework.



- The effect of VAT on expatriates will cost 5% more compare to earlier expenses for living in Saudi Arabia, Saving of expats will be impacted due to higher expenses, Dependent tax and higher fuel and utilities charges.




EFFECT OF VAT TAX ON EXPATS AND SALARIES

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