ArabFinance: Offices and commercial spaces will be subject to 14% value-added tax (VAT), the Tax Authority said in a statement.

Proposed amendments to the VAT Act would impose a 1% schedule tax on the rent or purchase of the commercial and administrative property.

The amendments, which earned sign-off from the cabinets economic committee in June, would replace the 5% schedule tax on crackers and sweet pastries with the standard 14% VAT rate.

In January 2021, the Ministry of Finance had sent new amendments relating to the VAT law to parliament for tentative approval. The amendments implied concessions for retailers, agri-producers, and the poultry industry, but at the same time, a hike in the rate for producers of snacks.

The Ministry had recommended a higher VAT of 14%, up from 5%, on snacks, sweets, soaps, and detergents, raising industry-wide concerns of a drop in demand due to the sizable hike.

Items and services exempted from taxes included: imported wheat, agricultural seeds that are locally produced, animal feed (for fish and poultry), paper (used in printing and magazines), non-touristic marine and air transportation for individuals, and medicines (approved by the Ministry of Health and Population).

Similarly, goods produced and imported into free zones, excluding automobiles, will be exempted from VAT.

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