Banks get set for collection of VAT

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Okaz/Saudi Gazette

JEDDAH — Banks in Saudi Arabia are making hectic preparations to adapt to the new tax regime approved by the Saudi Arabian Monetary Agency and taking effect beginning next month.

The banks have been sending text messages to their customers advising them about various services that will come under the purview of the value-added tax.

All six Gulf Cooperation Council (GCC) states had decided to impose VAT on certain products and services under a unified framework from Jan. 1, 2018, but only Saudi Arabia and the United Arab Emirates are proceeding with its implementation on schedule.

From Jan. 1, all customers will have to pay SR3.15 in tax for inquiring balances in a bank account maintained in any of the Gulf countries. For balance inquiry through ATMs, the tax is SR3.67 and sending money to a local bank account through express transfer will be taxed SR5.25. Same-day express transfer entails a tax of SR7.35.

Customers will have to pay an SR10.5 tax for activating an automatic payroll, issuing an additional checkbook of 25 leaves, canceling a check, demanding to disclose the date of a check issued within the same year and withdrawing money from ATMs in the Gulf countries.

Demanding to disclose the date of a check issued years ago will cost an additional SR21.

The VAT for activating an automatic payroll through a branch bank, express transfer through a branch bank, modifying or canceling money transfer electronically to an external account and issuing a check in foreign currency will be SR15.75.

Inquiring the balance in an account that was open less than a year ago, modifying or canceling a transfer request to an external account and transferring money from one bank to another through an express service that will take one day will be taxed SR26.5.

There will be a SR31.5 VAT for inquiring the balance in an account that was open within one year to five years, issuing an additional ATM card and reissuing a lost ATM card. The VAT for balance inquiry in an account older than five years from a branch of the bank and transfer of money to external account electronically will be SR52.5.

There will be a tax of SR78.75 on money transfer to an external account through a branch and for making purchases of SR5,000 or less using credit cards.

The tax-free services that banks will offer will include issuing monthly bank statements electronically or through the Saudi Post, balance inquiry through ATMs, withdrawal of money from bank branches, issuing debit cards, withdrawal and deposit of money, use of MADA cards at points of sale in the Kingdom and GCC states, renewal of debit cards or replacement of debit cards captured by ATMs, transfer of money from one account to another account of the same customer, defining beneficiary and issuance of a checkbook for the first time with 25 leaves.


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