Thursday, January 26, 2023
Residential rental is exempt from Value Added Tax in Saudi Arabia - Zakat, Tax and Customs Authority
The Zakat, Tax and Customs Authority (ZATCA) in Saudi Arabia confirmed that properties under residential rental system are exempt from paying Value Added Tax (VAT) of 15%. Join Saudi Expatriates Whatsapp group
However, the ZATCA clarified that, commercial leasing or renting is subject to a VAT of 15%, if the lease is carried out by a person registered in the Tax system. Recommend : Saudi Arabia will eventually consider reducing Value Added Tax
- The authority further highlighted that, everyone who carries out an economic activity is required to register in the VAT system, if the annual revenues reach the mandatory limit of 375 riyals.
- Earlier also the Zakat, Tax and Customs authority responded it to one of the users question on Ask Zakat and Tax official Twitter handle, in which the ZATCA said that the Value Added Tax on residential owned endowment, the proceeds of which belongs to charities are used for public benefit, stating that commercial leasing is subject to 15% VAT, if the lease is made by the person registered with VAT system. Read : VAT is not applicable on salaries, wages and bonuses of a worker
