VAT Implications for the Education Sector in the Kingdom of Saudi Arabia

From 1 January 2018, the Kingdom of Saudi Arabia (KSA) introduced a standard rate of Value Added Tax (VAT) (5%) on private education services. This means that, where certain criteria are met, VAT will be charged on such supplies. Some ancillary services connected with education are not taxable however, and therefore the provision of accommodation to students by education providers could lead to restrictions on input tax recovery.

This mixture of VAT liabilities, combined with complex funding arrangements, such as grants and sponsorship, presents challenges around effective VAT management. As such, it is crucial that robust VAT processes are in place to ensure the correct VAT treatment is applied and the correct amount of input tax is recovered.

Deloitte has developed this document to guide businesses in the education sector through the areas of VAT complexity. This includes exception to standard rate, input tax recovery, grant funded research, exempt supplies, IT systems, penalties and GAZT audits and funding by block grant, endowment or sponsorship. Download the document to learn more about these complexities and to understand how Deloitte can help.