The Value Added Tax law will apply to all our services starting 2018

STC intends to implement the Royal Decree relating to application of VAT by adding 5% tax on all mobile and landline services starting from 1 January 2018,
with VAT #300000157210003. You may access more information on the above by visiting the following link:
https://www.vat.gov.sa/ar/about-vat/law-regulations


Services subject to VAT:

1- Postpaid Plans
2- Sawa Prepaid SIMs
3- Postpaid QUICKNet
4- Prepaid QUICKNet
5- Smart Devices
6- Landlines and Internet Plans

1- Postpaid Plans

Services:
The VAT will be applied on all postpaid services including Postpaid Plans, international and local calls, add-ons, devices, and smart devices sold on installments.

Method of application:

The VAT will be applied at 5% of the total bill amount issued after 1/1/2018, and the customer will be notified accordingly when requesting a new service through SMS, STC website, and MySTC app, and the amount will be stated in the paper or electronic bill issued to the client

Example:

A customer subscribed on Postpaid 400 Plan and has monthly subscription in Sada and Mawjood Extra
Total service = total of SAR 400 (Postpaid 400) + usage + other fees – discounts = SAR 1002.25
VAT = 1002.25 * 5% = SAR 50.11
Due amount = total services + VAT = 1002.25 + 50.11 = SAR 1052.36

2- Sawa Prepaid SIMs

Sawa SIMs:

VAT will be applied on all Sawa SIMs including Sawa 25 and Sawa Visit.

Method of application:

VAT will be applied by adding 5% to the value of Sawa SIM purchased after 1/1/2018, and the customer will be notified accordingly when requesting the service through SMS, STC website, and MySTC app.

Example:

SAWA SIM Card Price (VAT included) Credit Value
SAWA 25 31.5 SR 25 Credit
SAWA ZIYARA 31.5 SR 25 Credit
* Price: SAR 31.5 (including 5% VAT).

Recharge Cards:

5% VAT will be applied to prepaid cards as follows:
- For ease of customers, VAT on older recharge cards with no imprinted VAT amount, will not be paid by customers, but covered by STC on their behalf.
- New recharge cards will have prices imprinted, inclusive of VAT.



Method of application:

The tax will be applied by deducting 5% of recharge card value after 1/1/2018 as follows:
-Plastic Recharge Cards and EVD:
-Application will be on cards reflecting tax value upon purchasing only
Old cards that do not have tax value printed on them are not subject to VAT
-Electronic recharging (via bank or Visa)
Tax will be applied directly after 1/1/2018 on all recharging amounts by adding 5% to banks.
-Recharging through Postpaid lines
Tax will be applied directly after 1/1/2018 on all recharging amounts by adding 5% that will be charged to the coming postpaid bill
The customer will be notified accordingly through SMS, STC website, and MySTC app.

Example:

Denomination Price (VAT included) Recharge value
Sawa 10 10.5 SR 10 Credit
Sawa 20 21 SR 20 Credit
Sawa 30 31.5 SR 30 Credit
Sawa 50 52.5 SR 50 Credit
Sawa 100 105 SR 100 Credit
Sawa 200 210 SR 200 Credit
Sawa 300 315 SR 333 Credit

Prepaid Plans:

The subscription fees in Sawa Plans (Sawa 10, Like, Share, Post, Star) are not subject to VAT as such tax has been applied already when purchasing recharge cards.

Method of application:

The customer will be notified when subscribing to Sawa plans through SMS, STC website, and MySTC app

Example:

Required Credit Plan
10 * Sawa 10
65 * Sawa Like
110 * Sawa Share
160 * Sawa Post
220 * Sawa Star

*The price does not include the 5% VAT as it has already been collected when purchasing the recharge card.

QUICKnet

Postpaid

Services:

The VAT will be applied on all postpaid services including Postpaid Plans, add-ons, roaming, devices, and devices sold on installments

Method of application:

The VAT will be applied at 5% of the total bill amount issued after 1/1/2018, and the customer will be notified accordingly when requesting a new service through SMS, STC website, and MySTC app
Authorized Text:
A 5% VAT will be added to the total amount of the bill.

3.2- Prepaid QUICKNet

Services:

Value Added Tax will be applied on all QUICKNET Data SIM and all QUICKNET recharge cards.

Method of application:

- Application will be on cards reflecting tax value upon purchasing only
- Old cards that do not have tax value printed on them are not subject to VAT
Authorized Text:
5% VAT will be added to the value of Data SIM and recharge cards.

Example:

The product The amount before applying VAT The amount after applying VAT
10 GBs SIM Card SAR 100 SAR 105
30 GBs SIM Card SAR 200 SAR 210
Unlimited SIM Card SAR 350 SAR 367.5

Smart Devices

Services:

Value Added Tax will be applied on all smart devices and monthly installment plans for smart devices.

Method of application:

5% VAT will be added to the advance payment (to be automatically displayed in the e-contract) and the total amount of bills issued after 1/1/2018 if they include a monthly installment plan of smart devices. The customer will be notified when he requests new service via (SMS, our website and MySTC app).
Authorized Text:
A 5% VAT will be added to the total amount of the bill.

Cash Payment for Devices:
5% VAT will be added to the value of all devices.


Phone and Internet services

Services:

VAT will be applied to all landline services and internet packages (e.g. Home Phone, Home Phone Plus and unlimited internet packages).

Method of application:

The VAT will be applied at 5% of the total bill amount issued after 1/1/2018, and the customer will be notified accordingly when requesting a new service through SMS, STC website, and MySTC app
Authorized Text:
A 5% VAT will be added to the total amount of the bill.

Q&A on VAT:

1 - Will value added tax be applied when using postpaid lines (landlines and mobile) for calling, sending SMS, browsing Internet, etc...?
Yes, the VAT will be applied on the total amount of the bill which will include all services of the postpaid line and will be illustrated on the customer's bill.


2-Will the VAT be applied when making calls or using extra data above the limit of my postpaid plan I subscribed for?
No, VAT will be applied to postpaid plan, including plan's allocation and usage above package, and will be added to the total amount of the customer's bill.


3-Will the VAT be applied when using postpaid line while roaming?
Yes, VAT will be applied to roaming packages of postpaid line, usage above package or roaming usage without package, and will be added to the customer's bill.


4-Will the VAT be applied when transferring amounts from a postpaid line to prepaid one?
Yes, the VAT will be applied on transferring amounts from a postpaid line to prepaid one, and will be charged to customer's bill.


5-Will the VAT be applied when subscribing to a postpaid plan?
Yes, the VAT will be applied on subscription to a postpaid line, and will be charged to customer's bill.


6-Will the VAT be applied on purchasing a postpaid line?
Yes, the VAT will be applied on purchase of a postpaid line, and will be charged to customer's bill


7-Will the VAT be applied on purchasing a prepaid line?
Yes, the VAT will be applied on purchasing a prepaid line.


8-How will the VAT be applied on prepaid services?
A 5% value added tax will be applied on Sawa SIM cards and recharge cards upon purchasing only.


9-Will value added tax be applied when using prepaid lines for calling, sending SMS, browsing Internet, etc.?
No, VAT will not be applied when using prepaid lines for calling, sending SMS, browsing Internet as it is already collected upon charging.


10-Will the VAT be applied when using prepaid line while roaming?
No, VAT will not be applied when using prepaid line while roaming as it is already collected upon charging.


11-Will the VAT be applied on credit transfers from one prepaid line to another?
No, VAT will not be applied on credit transfers from one prepaid line to another as it is already collected upon charging.


12-Will the VAT be applied when subscribing to a prepaid plan?
No, VAT will not be applied when subscribing to a prepaid plan as it is already collected upon charging.


13-Will the VAT be applied on negative credit balance of a prepaid line?
No, VAT will not be applied on negative credit balance of a prepaid line as it is already collected upon charging.


14-What will happen when I purchase a recharge card before 1/1/2018 and recharge my prepaid line on a later date?
You can recharge your line and VAT will not be applied on your credit because the purchase was made before application of the VAT.


15-How will the VAT be applied on purchasing a device on installments before 1/1/2018?
The VAT will be applied on all installments collected after 1/1/2018 and will be added to the total amount of the next bill.


16-How will the VAT be applied on contracts including the device signed for before 1/1/2018?
The VAT will be applied on the total amount of your bill which includes the contract price which will be issued after 1/1/2018.


17-Will the installment amounts of device plans change after ‪01/01/2018? ‬‬
If the customer opts for SAR 150/month plan for 12 months
Monthly installment SAR 150 plus 5% monthly (SAR 7.5) = SAR 157.5.

18-Will the VAT be calculated on a customer reaching credit limit and wishing to pay his/her bill?
Yes, the VAT will be applied on a customer reaching credit limit and wishing to pay his/her bill


19- A plan that has free minutes for calls to numbers outside STC such as Postpaid +400 which has 2000 free minutes; after consuming such minutes will VAT be applied on minutes consumed above the plan's free minutes?
Yes, the VAT will be applied on the total amount of the bill which will include all usage above package.


20- In cases of special offers from the Governorate to postpaid customers, will the VAT be applied on such offers?
Yes, VAT will be applied on the total amount of the customer's bill


21-If my bill amount is issued for SAR 1000 plus 5% VAT (SAR 50), the total will be SAR 1050. If a portion of the bill is paid (SAR 500 for example) and the rest is forwarded to the next month (SAR 550), will the VAT be calculate on the total original amount (SAR 1050) for the first month and then another tax be applied on the remainder (SAR 550) for the next month?
No VAT will be applied on the forwarded amount (SAR 550) as the VAT has already been calculated during the first month.


22-If the customer has an old debt and decided to pay in 2018, will the VAT be applied on such debt although such amount was charged before the VAT application decision was made?
No, VAT will not be applied on the customer in this case as the bill was issued before the application of the VAT.


23- How will the VAT be applied if the bill is issued on 15/1/2018?
The VAT will be applied on the total amount of the bill issued as of 1/1/2018.


24- How will the VAT be applied on monthly installment contracts made before 1/1/2018 Example: An installment contract for SAR 150/month on 18 months.
A 5% VAT will be added after the date of tax application on monthly installments.


25-Will the VAT amount be illustrated in the bill?
Yes, the VAT amount will be illustrated in the bill.


26-Will the VAT will be applied on international credit transferring service?
No, VAT will not applied when transferring international credit as such tax has been applied when recharging credit

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