- ZATCA has published new guidance on VAT on loyalty programs in Saudi Arabia.
- Loyalty programs in financial institutions align with the GCC VAT Agreement.
- The guidance covers tax implications of awarding loyalty points, transactions with merchants, and redeeming points.
- Individual contractual arrangements are important for accurate tax treatment.
- The concept of a “qualified voucher” is explained.
- Different scenarios are discussed, including purchasing vouchers, issuing and redeeming loyalty points, direct purchase and redemption of goods/services, and converting loyalty points to cash.
- Compliance requires understanding acquisition, redemption, and tax implications.
- There will be upcoming posts covering key provisions of the new guideline.
Source: aurifer.tax
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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