The Zakat and Income Tax Authority revealed that the commercial and residential real estate sector will be subject to the application of VAT. During a workshop organized by the Eastern Chamber of Commerce and Industry, Hamoud Al-Harbi, VAT project manager at the Authority, confirmed that some cases that will be clarified by the executive regulations will be exempted.

<Al-Hamoud pointed out that bank loans are not subject to VAT, noting that the exclusion of loans from this tax is natural, as the imposition of 5% on bank loans raises the cost for banks. Al-Harbi said that the authority will impose the tax on the invoice issued on goods, whether they are in warehouses or newly imported goods, adding that VAT will be imposed on services as well as goods. <VAT is a tax imposed on the difference between the cost price and the selling price of a product, and is considered an indirect tax imposed on all goods and services except those excluded by a decision. It is scheduled to be implemented in Saudi Arabia and the rest of the Gulf Cooperation Council from the beginning of next year at a rate of 5%.