Restriction for Claiming Input Tax - Saudi VAT

    2 years ago


Restriction for Claiming Input Tax - Saudi VAT

Expenditure relating to the following Goods or services is not considered to be incurred by the taxable Person in the course of carrying on his Economic Activity as per Saudi VAT law, and consequently, the taxable Person will not be permitted to deduct the Input Tax relating to such expenditure

Any form of entertainment, sporting or cultural services,

Input tax incurred for entertainment, sporting or cultural activities which are not related to the economic activity of Taxpayer.

Catering services in hotels, restaurants and similar venues,

Any type of restaurant or catering services received will not be treated as economic activity of taxpayer for the purpose VAT.

Expenses incurred for restricted motor vehicles

Purchase or lease of restricted motor vehicles

Repair, alteration, maintenance or similar services on restricted Motor Vehicles and Fuel used in restricted motor vehicles

A restricted motor vehicle means vehicles not exclusively used by the taxpayer or his employee for work purpose. In other words, vehicles used for both work-related and private purpose.

Any other goods and services used for a private or non-business purpose.

Apart from the items listed above any goods or services used for private use will be restricted from claiming or adjusting input tax credit.

Input Tax

Notwithstanding the first paragraph of this article, the purchase of any services listed in that paragraph which is intended for onward sale, without use by that Taxable Person, is considered to be effected in the course of carrying on that Taxable Person’s Economic activity and input tax can be claimed. 


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