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JEDDAH: The General Authority of Zakat and Tax (GAZT) announced on Dec. 24 that they are working on a mechanism to return the value-added tax (VAT) to tourists, but it will not be applied in the early months of 2018 as the process are yet to be established.
Hamoud Al-Harbi, director of the VAT operations center at GAZT, told Arab News: “According to executive regulations, it is possible for companies to return the VAT to tourists on products they are taking to their countries.”
He added: “The mechanism will be decided later as we are still working on the process, mechanisms, rules and payment. Some countries, for example, specify what amount to return; if it is less than €100 (SR445) it won’t be returned.”
He also said in a statement that the implementation of tax-free system for tourist purchases included in the VAT will not be applied in early January.
He pointed out that the executive regulation of VAT approved that the tax will be returned to tourists coming to ��������Ƶ if they paid the VAT on products that are on the list for the VAT.
Expat tourists who live in Gulf Cooperation Council (GCC) countries will not be included under the system of the returned VAT.
Tourists coming to the Kingdom will submit an application to have their VAT returned during their stay in the Kingdom.
Those who will apply for this service will be required provide proof of VAT payment and products they paid for before getting approval for the tax they paid to be returned.
The VAT is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions.
VAT is applied in more than 160 countries around the world as a reliable source of revenue for state budgets. VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service.
��������Ƶ is committed to impose VAT with effect from Jan. 1, 2018. VAT will be introduced at a standard rate of 5 percent.