Saudi Arabia is implementing Value Added Tax (VAT) from 1st January 2018. The implementation of VAT requires every business to be ready to apply this new tax. Here at STC, we are committed to being at the forefront of efforts to achieve full VAT compliance by the start of next year.

The introduction of VAT will have wide ranging implications for all businesses, large and small. Successful implementation of VAT by businesses is heavily dependent on having clarity and structure to VAT readiness preparations. Throughout 2017, STC has been working hard in ensuring a smooth, seamless, transition to this new tax regime. We are confident that our systems will be ready to cope with the required changes.

One significant change that you will notice will be the application of 5% VAT on our bills issued in 2018 and beyond. This charge will be applied on all net sales values. We will collect the 5% tax and pass it on to GAZT. Assuming your business is also VAT registered, you may be able to claim this VAT as input tax against your tax liability. Where this is the case, the net effect should be zero. Please note that our assumptions and statements are purely for illustrative purposes and we strongly recommend you seek professional tax advice to determine the exact impact of VAT on your business.

VAT is a complex subject and, as we progress through 2018, businesses in Saudi Arabia will develop their understanding, as well as recalibrate their systems and processes. STC is no exception to that. Rest assured that we are doing everything to minimize the impact of adopting the VAT regime, whilst ensuring full legislative compliance. We seek your continued support as trusted partners in ensuring successful navigation on this journey.