Category Taxation in Saudi Arabia

Saudi Arabia Launches Cigarette Tax

June 12, 2017 Taxation in Saudi Arabia

Smoking in Saudi ArabiaRIYADH – Smoking in Saudi Arabia is about to double in price, as the government begins taxing harmful activities.

On June 11th the sale of cigarettes in Saudi Arabia became taxable, resulting in a significant hike to the price of tobacco sold in the kingdom.

The tax on tobacco is set at a rate of 100 percent, and is expected to be passed on entirely to the consumer.

Similarly, a new tax was also enacted on the sale of energy drinks, with a rate set at 100 percent.

Soft drinks have also now fallen into the tax net, however, the rate on such drinks is only 50 percent.

The average price of a pack of cigarettes in Saudi Arabia has now risen to between SAR 18 and SAR 24.

The new tax is intended to raise extra revenues for the government, which has been suffering in the wake of falling oil pri...

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Saudi Arabia Comes Closer to Sugar and Tobacco Taxes

April 18, 2017 Taxation in Saudi Arabia

Energy Drinks in Saudi ArabiaRIYADH – Smokers and energy drink aficionados will soon feel the financial sting of hefty new taxes on their vices.

The Shura Council of Saudi Arabia has given its endorsement to a new selective tax measure which will see harmful substances heavily taxed.

The new taxes will apply to carbonated drinks, energy drinks, and tobacco, in an effort to curb the spread of obesity and health problems.

The taxes are also intended to raise an extra SAR 10 billion in tax revenues per year, as part of the government’s plan to close it SAR 279 billion budget gap.

Upon approval of the new measure, carbonated sold in Saudi Arabia will face a tax burden of 50 percent of the sale price, while tobacco and energy drinks will face a tax of 100 percent of the sale price.

The new tax shall now be provided to th...

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Saudi Arabia Slashing Tax for Oil Companies

March 28, 2017 Taxation in Saudi Arabia

Oil producers taxRIYADH – Saudi Arabia is eye tax changes which are stacked to heavily benefit the IPO of the state oil producer.

The government of Saudi Arabia has now announced that it will retroactively reduce the income tax paid by oil companies operating in the country, although some experts believe that the move is intended to increase the interest in the IPO of the state oil producer Saudi Aramco.

Currently, oil producers in Saudi Arabia are charged a rate of income tax of 85 percent, which would now be reduced to a rate of 50 percent, applicable for all incomes from January 1st this year.

The rate of the tax will vary based on the amount of investment committed by each respective firm, with lower levels of investment seeing a higher rate, maxing out at the current level of 85 percent.

It is expe...

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Cigarettes and Soda to be Taxed in Saudi Arabia

February 22, 2017 Taxation in Saudi Arabia

Cigarettes in Saudi ArabiaRIYADH – Saudi Arabia is taking steps to raise revenues which are not reliant on oil, with cigarettes and soft drinks set in the sights of the tax authorities.

On February 20th, the Council of Ministers of Saudi Arabia granted permission to the national Ministry of Finance to set a date for the implementation of selective taxes on cigarettes and soft drinks.

The new taxes are part of an agreement made by all the national of the Gulf Cooperative Council in 2015 to begin implementing a uniform tax system across the nations.

The tax measure was approved in Saudi Arabia in late 2016.

Saudi Arabia is the first country in the GCC to have gone so far as to allow their Ministry of Finance to set a date for the implementation of the selective taxes.

The taxes in question will see a 100 percent ...

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Saudi Arabia Won’t Enact Remittance Tax

January 23, 2017 Taxation in Saudi Arabia

Remittance tax Saudi ArabiaRIYADH – Saudi Arabia has put an end to rumours that it will look at foreign remittance to make up its tax shortfalls.

On January 22nd a spokesperson for the ministry of Finance of Saudi Arabia confirmed that the country would not be implementing a remittance tax, despite recent rumours claiming otherwise.

Over the last several months several government officials have proposed and discussed the feasibility of implementing a tax on any remittance sent from Saudi Arabia by individuals who are not citizens of the country.

The tax was expected to be set at a rate of approximately 6 percent for individuals who have resided in Saudi Arabia for less than a year, with the rate falling each year, to be capped at 3 percent.

Saudi Arabia is often regarded as having the second highest volume of ove...

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