The Minister of Finance of Saudi Arabia, Mohammed Al Jadaan, has confirmed that there will be a permanent exemption from value-added tax (VAT) on transactions between entities within special economic zones. Furthermore, there will be a tax reduction for a period of 20 years specifically within these zones.

The Minister of Finance of Saudi Arabia, Mohammed Al Jadaan, has confirmed that there will be a permanent exemption from value-added tax (VAT) on transactions between entities within special economic zones. Furthermore, there will be a tax reduction for a period of 20 years specifically within these zones.

These announcements were made during the “Investment in Special Economic Zones” forum, where Al Jadaan highlighted that Saudi Arabia is the only country to have received three positive ratings in 2023.

Al Jadaan stated, “We will implement tax reductions for a period of 20 years to enable investors to engage in long-term planning. Additionally, we will provide a permanent exemption from social insurance tax for employers, as well as for transactions between companies within special economic zones and between companies in different SEZs.”

In April, Crown Prince Mohammed bin Salman, Saudi Arabia’s Prime Minister and Chairman of the Council for Economic and Development Affairs, launched the new Special Economic Zones. Since then, these zones have attracted $12.6 billion in investments from various industries, including maritime, mining, manufacturing, logistics, and technology.

The Saudi Economic Cities and Special Zones Authority (ECZA) reported ongoing investments worth $31 billion.

Source: Arabian Business