Posted by : Aahil Shaik Tuesday, April 12, 2022

VAT is not applicable on Salaries, wages and bonuses of the worker in Saudi Arabia - Zakat Tax and Customs Authority

The Zakat, Tax and Customs Authority in Saudi Arabia restated that salaries, wages and all that the worker receives from the employer are including bonuses are not subjectable for VAT (Value Added Tax). Join Saudi Expatriates channel on imo

This came in response from Ask Zakat Twitter account for a query in this regard stating, Salaries received by employees, it does not result in any obligations for the purposes of VAT.

- The authority said, Value Added Tax does not apply to salaries, wages or any other amounts such as bonuses received by the employee from his employer or sponsor. See Also : No vat for selling used vehicle, only if that person is not registered with VAT system

- While for establishment expenses, the Zakat authority clarified that expenses can be deducted in the tax return, if they are in the context of carrying out economic activity only, and the tax has been carried on them.

- The Zakat and Tax authority also stated that, gold is subject to tax at a rate of zero, if its purity level in 99% and is tradable in the global bullion market only, but if its purity is less than 99%, it is subject to Value Added Tax.

- The authority highlighted that gold jewelry is subject to VAT of 15%, when sold by person registered in the Value Added Tax system. Recommend : No plans yet to reduce 15% VAT at anytime soon

VAT is not applicable on Salaries, wages and bonuses of the worker - Zakat Tax and Customs Authority -

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