Saudi Arabia increasing VAT rate to 15% from July 1st, 2020

Saudi Arabia VAT Calculator

Due the COVID-19 crisis from 1st of July, 2020 Saudi Arabia will raise its Value Added Tax rate from 5% to 15%.

Saudi Arabia government already suspended cost of living allowance from 1st of June, 2020. This allowance was introduced in 2018 to help offset Value Added Tax.

United Arab Emirates announced it will not follow Saudi Arabia’s increase of VAT in UAE.

Saudi Arabia VAT Calculator was adjusted accordingly and now you can calculate 15% Value Added Tax in Saudi Arabia.

Measures taken to support the European economy in face of the coronavirus crisis

EU measures covid-19

The European Commission (EC) is coordinating a common European response to the outbreak of COVID-19. The European Commission and European Central Bank (ECB) are taking resolute action to reinforce our public health sectors and mitigate the socio-economic impact in the European Union.

Here is a message from President of the European Commission – Ursula von der Leyen, on the latest measures to address the coronavirus.

ECB announces €750 billion Pandemic Emergency Purchase Programme
European Central Bank announced new Pandemic Emergency Purchase Programme (PEPP) which will have an overall envelope of €750 billion. Purchases will be conducted until the end of 2020 and will include all the asset categories eligible under the existing asset purchase programme (APP). Read more here.

European Commission economic response
European Commission has proposed to activate the general escape clause of the Stability and Growth Pact (SGP) as part of its strategy to respond quickly, forcefully and in a coordinated manner to the coronavirus pandemic. Once endorsed by the Council, it will allow Member States to undertake measures to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework. Read more here.

Next quarter VAT payments deferred in UK

Rishki Sunak announced VAT deferring

On March 20, 2020 UK Chancellor of the Exchequer Rishi Sunak announced about large aid for UK business and employees.

This is video with full announcement:

Here are some important citation from this announcement:

“<..>Today I can announce it for the first time in our history the government is going to step in and help to pay people’s wages. We’re setting a new coronavirus job retention scheme.
Any employer in the country. Small or large, charitable or non-profit will be eligible for the scheme. Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furlough and kept on payroll rather than being laid off.
Government grants will cover 80% of the salary of retained workers up to a total of 2,500 pounds a month. <..> Scheme will cover the cost of wages back dated to March 1st and will be open initially for at least three months<..>”

“<..>I can announce today that the coronavirus business interruption loan scheme will be interest-free for 12 months<..>”

“<..>I am also announcing today further cash flow support through the cash tax system to help businesses pay people and keep them in work I am deferring the next quarter of VAT payments. That means no business will pay no VAT from now until the end of June. And you’ll have until the end of the financial year to repay those bills<..>”

“<..>That is a direct injection of over 30 billion pounds of cash to businesses equivalent to 1.5% of GDP<..>”

VAT/Sales tax names around the world

In majority countries sales tax is called Value-Added Tax (VAT). The second most popular name is Goods and Services Tax (GST). But there are 10s other different names. Here is a list how sales taxes are named in different countries around the world.

Abbreviation NameCountries
CTConsumption taxJapan
CTCommercial TaxMyanmar
GBRTGross Business Receipts TaxTaiwan
GETGeneral Expenditure TaxBonaire, Sint Eustatius and Saba
GSTGoods and Services TaxAustralia, Canada, India, Jersey, Jordan, Malaysia, Maldives, New Zealand, Papua New Guinea, Singapore,
HSTHarmonized Services TaxCanada
ITBISTax on the Transfer of Industrialized Goods and ServicesDominican Republic
RTRevenue TaxSint Maarten, Aruba
STSales TaxPakistan, United States
SUTSales and Use TaxPuerto Rico
TGSTTourism Goods and Services TaxMaldives
TOTTurnover TaxCuraçao, Suriname
VATValue-Added Taxall other countries

In Brazil they have unique names for taxes they collect. Here is separate list of sales tax names in Brazil:

ICMSState Value-Added Tax
IPIFederal Value-Added Tax
ISSMunicipal Service Tax
PIS-PASEP, COFINSFederal Gross Receipt Contributions

Japan increased consumption tax (VAT) from 1st of October 2019

Japan Consumption Tax Calculator

From 1st of October, 2019 Japan increased Consumption Tax from 8% to 10%. It was long delayed tax rise and was postponed couple times already.

The new Consumption Tax applied for most goods and services. But there are some exemptions like food and regular newspapers. Reduced consumption tax of 8 percent will be used for exempt goods and services.

Our Japanese VAT calculator is updated with the latest changes and calculate both – regular and reduced CT.

UK VAT after Brexit

UK VAT Calculator

After last week’s UK referendum a lot of people are worrying that will happen with VAT system in UK and EU. Because of so many trades between UK and continental Europe it can be mess. At the moment UK VAT rates are regulated by EU laws and VAT rate can not be less then 15%. There are other VAT requirements which UK is obligated to comply as EU state.

It will take some time until changes will be done and it will depend on the deal UK will manage to make with EU. But it definitely will impact UK import/export as goods won’t be able to be transported as free as it is done up to date.

What can be done right now? Nothing. We just need to sit and wait until UK and EU parliaments will make some decisions.