Riyadh: Saudi Arabia will impose a 5% levy in Value Added Tax (VAT) on money transfer fees from the 1st of January.
The Saudi General Authority of Zakat and Tax (GAZT) announced that the transferred money would be exempted from the 5% levy, adding that the tax would be imposed on transfer fees only.
A GAZT statement said that the levy on money transfers would be paid by the people sending the money abroad.
The Saudi authorities have exempted a raft of financial services from paying the 5% VAT - including interest on loans, lending fees charged with an implicit margin such as loans and credit cards, mortgages, financial leasing, transactions involving money and securities, as well as current, deposit and savings accounts and life insurance policies.
The 5% Value Added Tax (VAT) will take effect in Saudi Arabia on the 1st of January, 2018.
No VAT levy would be imposed on passports, driving license issuance and renewal, house rents, medicines, exports to non-GCC countries Gulf Cooperation Council, services given to non-residents of GCC countries, international transport services for goods and passengers, import of spare parts of qualified means of international transport and their maintenance, repair and modifications.
- With inputs from Saudi Gazette