Saudi Arabia launches tourist tax refund scheme
These changes are designed to improve compliance with VAT laws
Dubai: Saudi Arabia launches a tourist tax refund scheme to attract more visitors and enhance its competitiveness with neighbouring Gulf countries.
In late August, the Zakat, Customs, and Tax Authority initiated a public consultation on proposed changes to tax regulations.
These changes are designed to improve compliance with value-added tax (VAT) laws and provide relief to certain VAT payers.
While Saudi Arabia does not levy personal income tax, excise duties were introduced in 2017, and VAT was increased to 15 per cent in 2020 from 5 per cent when it was first implemented in 2018.
The new tourist refund follows the recent suspension of licensing fees for hotels, hotel apartments, and resorts, part of the government's strategy to increase tourism's contribution to gross domestic product (GDP) to 10 per cent by 2030.
This will place Saudi Arabia as a global touristic destination.
Saudi Arabia aims to attract 50 million religious tourists annually by 2030. Additionally, Saudi Arabia plans to simplify foreign investor registration starting in January to boost its foreign direct investment figures.
The Capital Markets Authority is considering eliminating the 5 per cent withholding tax on interest payments to corporate bondholders.
Currently, non-GCC investors in Saudi Arabia face a 20 per cent corporate income tax, which can rise to at least 50 per cent for oil and hydrocarbon producers.