The Saudi General Authority of Zakat and Tax (GAZT) has issued a release that clarifies the value added tax (VAT) zero-rating and exemptions for select goods and services as provided in the implementing regulations for Saudi Arabia's new VAT regime, which will be introduced on 1 January 2018.
Zero-rated goods and services include:
Exempted supplies include certain financial services and the rental of residential real estate. Further, any activity exercised by a government body in its capacity as a public authority is not considered to be an economic activity and as such, falls outside the VAT scope and is not subject to VAT.
In a separate release, the GAZT further clarifies the exemption for financial services supplies, which covers:
The VAT exemption excludes cases where consideration payable in respect of the service is by way of an explicit fee, commission, or commercial discount, including fees on money transfers.