Tax is imposed on all Taxable Supplies by a Taxable Person in the Kingdom. It is also imposed on Goods and Services received by the Taxable Customer in instances where the Reverse Charge Mechanism applies. It is also applicable to Import of Goods in accordance with the provisions of this law.

 Taxable Supplies: Supplies on which Tax is charged whether at the standard rate or zero-rate and for which associated Input Tax is deducted in accordance with the provisions of this law.

 Taxable Person: A Person conducting an Economic Activity independently for the purpose of generating income, who is registered or obligated to register for VAT in accordance with the provisions of this Agreement.

 Goods: All types of material property (material assets), including water and all forms of energy including electricity, gas, light, heat, cooling and air conditioning.

 Services: Everything that is not good whether local or imported.

 Reverse Charge Mechanism: The mechanism by which the Taxable Person is obligated to pay the Tax due on behalf of the Supplier and is liable for all the obligations provided for in this law

 Import of Goods: The entry of Goods into any Member State from outside the Implementing GCC states in accordance with the provisions of The Customs Law.

Exceptions to the effective scope

The provisions stipulated in Chapters Seventeen, Eighteen, Nineteen and Twenty of these Regulations shall not apply to military forces and security bodies operating in the Kingdom. Furthermore, any other provisions of these Regulations shall not prejudice the necessary confidentiality requirements of the affairs of the aforementioned bodies.

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