Saudi Arabia to impose VAT on private education starting January 2018

Value-added tax (VAT) will be imposed on private education institutions in Saudi Arabia starting January 2018, Alriyadh newspaper has reported, citing Malik Ghazi Taleb, chairman of the private and international school committee at the Jeddah Chamber of Commerce and Industry (JCCI).

The VAT will be applied on school tuition, as well as student transfer fees.

As private schools are banned from raising tuition fees during the academic year, they will submit a fee increase request to the Saudi ministry of education, which if approved, will be implemented as of the academic year 2019. However, it is still unclear whether the schools or parents will pay the new tax.

The Saudi cabinet approved in February a unified selective tax agreement at 100 percent on tobacco and byproducts, as well as energy beverages, and a 50 percent tax on soft drinks.