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ZATCA Issues Tax Circular on VAT Treatment of Certain Supplies in the Financial Services Industry
Riyadh January 15, 2023:
The Zakat, Tax and Customs Authority (ZATCA) has issued a new circular to clarify the VAT laws and provisions concerned with certain supplies of services in the financial and their application in specific circumstances.
The circular provides information and guidance on the application of VAT rules in respect of two types of transactions that involve banks and financial institutions in KSA:
- Supplies of services by international banks established in KSA to non-resident customers.
- Incentives provided by credit card companies to banks in return for achieving operational targets.
The circular is based on the unified VAT agreement of the states of the Gulf Cooperation Council ( Unified VAT Agreement), Value Added Tax Law (VAT Law) and Value Added Tax implementing regulations as well as the general practice with respect to applicable rules.