What Will Change

Saudi Arabia is implementing Value Added Tax (VAT) starting January 1st, 2018.

Saudi Arabia is implementing Value Added Tax (VAT) from 1st January 2018. The implementation of VAT requires every business to be ready to apply this new tax. Here at STC, we are committed to being at the forefront of efforts to achieve full VAT compliance by the start of next year.

The introduction of VAT will have wide ranging implications for all businesses, large and small. Successful implementation of VAT by businesses is heavily dependent on having clarity and structure to VAT readiness preparations. Throughout 2017, STC has been working hard in ensuring a smooth, seamless, transition to this new tax regime. We are confident that our systems will be ready to cope with the required changes.

One significant change that you will notice will be the application of 5% VAT on our bills issued in 2018 and beyond. This charge will be applied on all net sales values. We will collect the 5% tax and pass it on to GAZT. Assuming your business is also VAT registered, you may be able to claim this VAT as input tax against your tax liability. Where this is the case, the net effect should be zero. Please note that our assumptions and statements are purely for illustrative purposes and we strongly recommend you seek professional tax advice to determine the exact impact of VAT on your business.

VAT is a complex subject and, as we progress through 2018, businesses in Saudi Arabia will develop their understanding, as well as recalibrate their systems and processes. STC is no exception to that. Rest assured that we are doing everything to minimize the impact of adopting the VAT regime, whilst ensuring full legislative compliance. We seek your continued support as trusted partners in ensuring successful navigation on this journey.


GENERAL QUESTIONS:

When will VAT apply and will it apply to everything?

VAT is applicable from 1st January 2018 and it will be applied to all STC EBU products and services

Why are you charging me?

It is a legal obligation to comply with VAT regulations. The VAT we charge is not STC money. It is a government tax and we are merely acting as collection agents. We will pay this amount to the government.

How much VAT will I pay?

5% on your total bill. For example, if your current bill is SAR 100, your bill in 2018 with VAT, will be SAR 105

Is there anything you can do to NOT charge me VAT?

We must comply with Saudi Arabian laws and regulations

Why doesn’t STC pay my tax?

VAT is a tax on the end consumer and STC cannot bear the burden of this tax on behalf of its customers.

How can I minimize my tax?

Please seek professional tax advice on this matter. STC cannot provide any such advice

Can I reclaim the tax?

Please seek professional tax advice on this matter. STC cannot provide any such advice

Can I get an extra discount to cover the VAT?

All prices are negotiated in good faith. VAT is not an increase in our sales price; it is a tax from the government.

What if I do not pay you the tax?

VAT payment and compliance with VAT laws and regulations are obligatory.

Can I charge VAT to my customers?

Please seek professional tax advice on this matter. STC cannot provide any such advice.

Where can I get more information?

Please go to for more information


Note: we have also sent an SMS about VAT to the mobile number registered in our system for your organization.

Your browser is not supported

Please update your browser or use the latest version of any of the below browsers