KSA Tax Authority publishes a newly updated VAT Guideline on Employee Benefits

The Zakat, Tax and Customs Authority (“ZATCA”) – The tax authority in the Kingdom of Saudi Arabia has published a new and updated VAT guideline on Employee Benefits.

The new guideline currently available only in Arabic (available at the ZATCA’s official website مزايا الموظفين.pdf (zatca.gov.sa) seeks in part to clarify the conditions under which employee outsourced services may be treated either in scope or outside the scope of KSA VAT. Several other nuanced areas have also been clarified with examples.

Many businesses in the Kingdom including multinationals rely on outsourced labor. The guideline is expected to have a wider impact on such businesses as some outsourced employee services may likely be considered in the scope of the 15% VAT from from the ZATCA’s point of view.

Contribution: Abdul-Nafiu Mohammed

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