15% VAT to be charged on E-Commerce imported goods in Saudi Arabia

Saudi Arab has confirmed that VAT on imports will have to be implemented if consignment reaches after the 1st of July.

It has been confirmed by the Saudi Customs, that transactions of imported goods from outside Saudi Arabia, through e-commerce will be subjected to a fifteen percent Value Added Tax (VAT) after 1^st July.

The General Authority of Customs posted a tweet on its Twitter account, stating that purchase and sales in e-stores, which include importing products to the state through customs, will be subjected to the Value Added Tax (VAT) of fifteen percent. However, they also added that this can only be applied if the consignment arrives after or on the first of July, 2020.

This adjusted tax can be applied to all supplies of imported taxable goods and services that are brought into the state. These goods have to be subjected to the five percent tax in order for the VAT policy to apply.

At the beginning of last month, it was announced by Saudi Arabia that it would triple its Value Added Tax (VAT), from 5 percent to 15 percent. They announced that this was part of their measures to support its economy, which had been affected due to COVID-19 that had led to a decrease in the demand for oil, resulting in lower prices.

Saudi Arabia’s government also declared that as part of the austerity steps, they will suspend the cost of living allowance.

Moreover, as Saudi Arabia comes under one of the biggest affected countries due to coronavirus within the Middle East, the increase in the Value Added Tax (VAT) makes sense. The country has reported more than 178,504 cases and more than 1,511 deaths.