Riyadh – Mubasher: The value added tax (VAT) will not be applied on financial and banking services, said Talaat Hafez, secretary-general of the Media and Banking Awareness Committee of Saudi Banks.
VAT will be imposed on the direct fees collected by financial authorities' services, such as fees of issuing checks, deposits, and remittances , Hafez added.
Moreover, bank loans and their profit margins will be VAT-free, the top official said.
On Sunday, Saudi Arabia announced list of VAT-free services. The Kingdom is set to put the new tax into effect as of January 2018.
VAT is composite tax applied on the differential between cost and selling prices of the product.
VAT, whch considers indirect tax, is also applied on production cost.
