Saudi Arabia Clarifies VAT Exemptions

Saudi Arabia’s General Authority of Zakat and Tax (GAZT) has clarified that items classified as zero-rated, exempt, or outside the VAT scope will not be subjected to a 5 percent value-added tax (VAT). Zero-rated items refer to medical equipment specified by the Ministry of Health, tradable minerals such as gold and silver which are at least 99 percent pure, and exports sent out of the GCC. Exempted items refer to the issuance, transfer, or receipt of finance services, provisions of credit or life insurance contracts, and rental of residential real estate. Items which are undertaken by government bodies, such as the issuance of passports and driver licenses, will not be subjected to the VAT tax.