Electricity and water bills tax issued after July 1 is set at 15%
Commercial leasing (if its revenues exceed 375 thousand annually, it will be 15% as well.
Advisor to the Authority’s Deputy Governor for Operations, Hammoud bin Abdullah Al-Harbi, said that the transitional phase of the value-added tax, which was set at 15%, will continue until June 30, 2021, starting on May 11, indicating that defining the transitional phase is a necessity to address long contracts concluded months ago. , Which persists for more than 12 months, This was made clear in a direct meeting entitled "Transitional Provisions to Increase the Basic Value Added Tax to 15%", which was organized by the Commercial Committee of the Asharqia Chamber yesterday (Wednesday 6/6/2020), with the follow-up of more than 400 people, indicating that the value-added tax is Imported goods will be applied with the date of import. If the import was made before the end of June 30, 2020, a rate of 5% applies to it. If the import is made after this date, the modified percentage is applied, which is 15%.
During the meeting, which was chaired by the Chairman of the Chamber of Commerce in the Chamber, Hani bin Hassan Al-Afaliq indicated that the goods imported from the countries of the Gulf Cooperation Council are taxable, and will be 15% after the first of next July, if the goods were brought for a commercial purpose, pointing out that the agreement with the GCC countries In the transitional phase, it provides for the establishment of an electronic system for tax supplies in the countries applying the tax, but this electronic system has not been implemented now, and therefore the agreement between the states stipulates the treatment of Gulf countries such as countries outside the GCC countries, such as imports from other countries (such as China and France For example), therefore, goods from the GCC after 1 July will be subject to 15%.
He pointed out that airlines can issue tickets after a 15% tax deduction for the service provided after July 1, knowing that international airline tickets and foreign hotel reservations are "zero."
He pointed out that the conclusion of contracts with government agencies includes "award letter" so that the transitional phase of the new tax applies to it as soon as it is issued before May 11.
He pointed out that commercial leasing is subject to value-added tax if revenues exceed 375 thousand annually, and that the electricity and water bills issued after July 1 will be 15%.
And in the case of contracts between a facility registered in the value-added tax with a government agency, it is noteworthy that if the contracts before May 11 and continuous supplies until after July 1 next, a 5% tax will be applied to them until the date of expiry or renewal of the contract or the date of June 30, 2021, noting Until contracts from May 11 to June 30, 2020, the tax is applied at 5% if it was physically supplied before the end of June 30, while the tax applies at 15% if it was actually received on or after July 1, 2020. In the same case, if it is done Contracts between two establishments registered in VAT before May 11, 2020, and continuing supplies until after July 1, 2020, give the customer the right to deduct the input tax in full, where the tax is applied at 5% until the date of expiry or renewal of the contract or the date of June 50, 2021, and in the event Contracting from May 11 to June 30, 2020, the tax is applied at 5% if it was physically supplied before the end of June 30, 2020, and the tax applies at 15% if it was actually received on or after July 1, 2020.
He added that if the tax bill is issued before May 11, 2020, and the supply related to the bill was issued on or after July 1, 2020, it will be applied at a rate of 5% on that supply provided that the supply is actually done before the end of June 30, 2021, while the tax bill issued from the date of May 11 to June 30, 2020, is applied at a rate of 5% in the event of an actual supply before the end of June 30 and a tax of 15% is applied if the supply was made on or after 1 July 2020.
