Saudi Arabia’s VAT implementing regulations defined

Among transactions exempted from Saudi Arabia’s Value Added Tax include loans, credit cards, mortgages and deposits and savings accounts. (Reuters)
Updated 10 November 2017
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Saudi Arabia’s VAT implementing regulations defined

RIYADH: The implementing regulations of the Value Added Tax (VAT) system has defined exempted activities in the financial sector that include many types of transactions and services, such as interest on loans or lending fees charged with an implicit profit margin.
These exempted activities include loans, credit cards, mortgages, finance leases, banknotes or securities transactions, current accounts, deposits and savings accounts. The transfer of funds from the tax has also been exempted and charged to the transfer fees.
As for the transfer of funds, the executive regulation demonstrated, as quoted by Al-Hayat newspaper, that the amount transferred is not subject to VAT, but is charged with a transfer fee of 5 percent and paid by the person who transfers the money.
The regulation specifies taxable cases of 5 percent, subject to tax at zero rated, exempt or outside the scope of the tax.
Entities engaged in economic activity subject to tax shall be entitled to recover the amount of the VAT they paid on their taxable inputs, which are related only to taxable activities by 5 percent or zero rated. Enterprises engaged in exempt economic activities are not entitled to recover the amount of VAT they have paid on their taxable inputs.
The VAT will be applied in the Kingdom on January 1, 2018 as part of the Unified Agreement for VAT in the GCC Region.
The General Authority of Zakat and Tax has invited all entities to register in the VAT through the VAT.GOV.SA website. This website provides a wide range of tools and information that is a reference to support these enterprises to ensure their readiness, along with visual aids, all the information, and general and technical FAQs that include aspects of the registration process and the willingness to apply the tax.


No peace in region without two-state solution: French envoy in Riyadh

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No peace in region without two-state solution: French envoy in Riyadh

  • Patrick Maisonnave affirms support for Saudi-led efforts in Yemen, emphasizes diplomacy, humanitarian aid, and long-term stability
  • Maisonnave said that there are ongoing discussions within the EU regarding designating the Houthis as a Foreign Terrorist Organization

RIYADH: As Saudi-French bilateral ties grow both politically and culturally, French Ambassador to Saudi Arabia Patrick Maisonnave sat down with Arab News to discuss the two nations’ roles at a time when the global stage is falling into deeper disarray.

The ambassador shared his thoughts on the situation in Gaza, reaffirming France’s support for a two-state solution. “I believe there is clearly no alternative to the two-state solution,” he said.

The envoy added: “In the current conditions, it may seem out of reach. But if we consider the medium and long term, there will be no coexistence, no regional stability, and no peace in that region without a two-state solution.”

Although the steps needed for international players to move from declaration to implementation were not outlined, Maisonnave asserted that a path must be taken — a strong demand he shares with the Kingdom.

When asked what his thoughts were on the EU’s level of engagement with the conflict in Yemen, the ambassador underlined that the EU and its member states remain key contributors to humanitarian efforts, continuing to provide funding and support for relief operations.

Despite ongoing diplomatic efforts, the situation in Yemen remains “serious and demanding,” he said, pointing to the scale of needs on the ground.

Maisonnave’s remarks align with broader EU policy, which has focused on increasing humanitarian aid through multi-million-euro funding packages aimed at providing food, healthcare, clean water, and sanitation to vulnerable Yemenis.

The EU has additionally expressed its support for diplomatic and political efforts to achieve a peaceful resolution to the conflict, but progress toward a comprehensive peace agreement in coordination with the UN and its regional partners has been slow.

“It is also very clear to (France) that for Saudi Arabia, this issue is one of stability and security. We fully support the efforts undertaken by Saudi Arabia to restore peace and stability in Yemen,” the envoy said.

Maisonnave also shared that there are ongoing discussions within the EU regarding designating the Houthis as a Foreign Terrorist Organization, as the US, Saudi Arabia, Canada, the UK, and New Zealand already have.

Finally, reflecting on years of strong relations between France and Saudi Arabia, amplified by recent accelerated growth, the envoy gave much credit to President Emmanuel Macron’s visit to the Kingdom in December 2024 and the strategic partnerships born from it.

“Since then, many efforts have been undertaken across a wide range of fields to deepen cooperation — economic, defense, culture, and more,” Maisonnave said.

Nearly eight years ago, in April 2018, Saudi Arabia and France signed a landmark intergovernmental agreement to cooperate on the sustainable development of the AlUla region.

This agreement launched a long-term strategic partnership, which included the creation of the French Agency for AlUla Development to support the Royal Commission of AlUla in transforming the site into a global cultural and tourism destination.

“In the coming days, we will inaugurate a major cultural exhibition by the Centre Pompidou in AlUla, which I believe will be very successful.

“Beyond AlUla, we also have many exhibitions across the Kingdom.”

Recently, the French Institute in Saudi Arabia, in collaboration with Riyadh Art, launched La Fabrique in the JAX District, a Saudi-French artistic space for creatives to collaborate, exchange ideas, and develop joint exhibitions and programs.

Designed as an open laboratory as well as a living museum, La Fabrique opened on Jan. 22 and will run until Feb. 14.