No VAT on Expat Remittances, VAT is applicable to Bank’s Fee

We all know that VAT (Value-added tax) will be implemented starting January 1, 2018.  Saudi Arabia has not imposed any tax since my stay in here, and I believe that the current VAT that will be implemented in 2018 is just normal. In fact, other countries like the Philippines have higher VAT which is 12%. Good to hear from ARAB News latest report that bankers confirm that Expat Remittances will not be subject to VAT but only the Remittance Fee will be subject to VAT.  The report says:

“Money remittance outflows will be exempted,” said Abdullah Ali Nasser Alfuraiji, chief of the Tahweel Al-Rajhi in Riyadh. Alfuraiji made it clear that “the 5 percent VAT tax would be levied on the remittance service fees, rather than the remittances themselves.

The imposition of 5 percent VAT “on service charges, not on remittance amounts” was also confirmed by Anwar Ahmed Wajid Khajja, manager of products and partners at Fawri, the remittance wing of Bank Aljazirah in Riyadh.

5% of fees will be negligible from remittances fees, as an example if we are sending money for which we are paying SR 20 per transaction, after VAT implementation it will be SAR 21.

Expats have been tax-free for a very long time, and it is high time to help the Saudi Government with their initiative with their 2030 Vision.

Just a suggestion if your planning to buy things in 2018, better buy it now so will not be subject to VAT, but of course, there is always a SALE Season if you can wait.

Source: ArabNews