On May 12, 2020, Saudi Arabia’s Ministry of Finance issued a press release announcing the increase of the value-added tax (VAT) from 5% to 15% effective July 1, 2020. This is one of several measures being taken to address the economic concerns resulting from the coronavirus pandemic. Customs duties have also been increased as of June 20, 2020 on a variety of products.
The Minister of Finance, Mohammad Aljadaan, stated, “These measures that have been undertaken today, as tough as they are, are necessary and beneficial to maintain comprehensive financial and economic stability on the medium and long-term for the interest of the country and its citizens.”
To support this measure, on June 7, 2020, the General Authority of Zakat & Tax published transitional provisions and guidelines on the VAT increase. The guidelines specify that the 15% VAT will apply to all importations occurring after June 30, 2020. 5% VAT will apply to all importations fulfilled on or before June 30th.
The press release can be found here:
The guidelines can be found here:
The list of products affected by the customs duty increase can be found here: