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Frequently Asked Questions on VAT

Last updated on 26 July, 2018


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What is the impact of long-term contracts on one-off supply of goods or services completed before January 1, 2018?

For one-off supplies of goods or services where the transfer of ownership has been completed before January 1, 2018, VAT will not be applicable on the instalments due after January 1, 2018. 

For example, consider a vehicle dealer selling a car on August 20, 2017 for SAR 100,000. The customer takes ownership of the car on that date, even though they still have consideration payable in 12 monthly instalments. Since they took ownership before VAT came into effect, VAT will not be charged on any of their instalments, including those paid after January 2018.

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