The Director of Operations for Value-Added Tax at the General Authority for Zakat and Income, Hamoud Al-Harbi, said that off-plan sales are not exempt from value-added tax, with the exception of Ministry of Housing projects.

Al-Harbi said that government contracts for which services were provided before the beginning of next January and for which the submission of tax returns was delayed until 2018 are exempt from VAT, adding that contracts signed before May 30, 2017, are subject to a zero VAT rate, provided that the service recipient is entitled to a full input tax deduction and submits a certificate to that effect to the supplier.

He clarified that all government entities are subject to value-added tax, and the Authority has contacted all ministries, including the Ministry of Finance in particular.

Regarding the application of VAT to bank financing, Al-Harbi noted that financing obtained from a bank to purchase real estate is considered exempt, but financing that results in ownership is subject to VAT on each installment.