Article (4)
 

(a)  For the purposes of this Law, a supply shall be realized when goods are transferred from the supplier, or services

     are performed by him, to the benefit of the purchaser or recipient for a consideration. It shall also be deemed to be

     supply under this Law when goods are used by the taxable person for his own purposes, when a third party is

     enabled by him to do so, whether or not for a consideration, or when goods are disposed of by any other legal

     action transferring ownership.

(b)  The general tax shall be imposed on the following:

(1)  A supply of goods and/or service, unless such supply is exempted, relieved, or not subject to tax under this

      Law.

(2)  Import of goods or service from abroad or from the free zones, cities and duty-free shops, unless such

      import is exempted, relieved, or not subject to tax under this Law.

(c) Without prejudice to the provisions of paragraph (b) above, the special tax shall be imposed once and for all on the

      goods listed in Schedule (1) annexed to this Law in any of the following two cases:

(1)  Import any of those goods from abroad or from the free zones, cities, or duty free shops.

              (2 ) Putting those goods, if locally produced, for free circulation for the first time, or at the first or subsequent

                     point of sale according to Directives to be specified by the Director.

Article (5)

 

(a)  For the purposes of this Law, Customs Tariff Tables and the relevant Explanatory Notes in force under the

     Customs Law shall be the reference taken for identifying the nomenclature of goods. The international

     classifications issued by the Secretariat of the United Nations shall be adopted as a reference for the identification

     of services.

(b) The Director may define the taxable person as totally supplying either goods or service when both supplied

     together at the same time, as may be the case. However, the taxable person may make separate entries for both

     the supply of goods and the supply of service.

(c) For the purposes of this Law, a body who imports or supplies goods or services shall be considered a Person

     regardless of its entity.

Article (6)
 

(a) A general tax of (16%) shall be imposed by this Law on the supply or import of taxable goods or services.

(b) Subject to the provisions of Article (3) of this Law, the special tax shall be chargeable on the goods and services

     listed in Schedule (1) annexed to this Law at specific or advalorem rates to be specified by Regulations made for

     this purpose.

Article (7)
 

(a) Subject to the provisions of paragraph (c) below, the general tax and the special tax, as may be the case, shall be

     chargeable at zero rate on the supply or import of any of the following goods and services:

(1) Goods and services listed in Schedule (2) annexed to this Law.

(2) Goods and services supplied to free zones, cities and duty free shops, or exported outside the kingdom.

(3) Goods and services supplied to the bodies relieved from payment of tax under Article (21) of this Law and according to the provisions provided for there under.

(b) Goods and services listed in Schedule (3) annexed to this Law shall be considered tax-exempt.

(c)  Subject to the provisions of Paragraph (d) below, the supply of goods and services listed in Schedules (2) and (3)

      annexed to this Law shall be subject to the general tax when supplied in combination with other supply of goods

     or services subject to this tax.

(d)  In case where a financial service exempted under Schedule (3) of this Law is supplied in combination with a

     supply of taxable goods, such supply of goods shall remain taxable. The taxable value in this case shall be

     determined by reference to the value of goods in question independently of the value of the exempt service.

Article (8)
 

A Registered person shall be required to account for, declare and pay the tax to the Department within the dates prescribed in this Law.

Article (9) Time of Supply
 

(a) Tax, whether general or special, becomes due on the supply of goods when any of the following events take place whichever is sooner:

(1) Delivery of goods. However, the Director may consider the date of the tax invoice as the tax point in case where

     it is issued periodically or at the end of a certain period following the date of delivery.

(2) Issue of tax invoice.

(3)Receipt of the value of goods, wholly or partially, receipt of credit payment or any other receipt of value according to the agreed terms of payments.

 (b) Tax becomes due on the supply of service when any of the following two events take place whichever is sooner:

      (1) Issue of tax invoice.

      (2) Receipt of payment for the service, wholly or partially.

 (c) Tax shall be payable in any of the cases provided for in paragraphs (a) and (b) above by reference to whichever is 

      higher, either the value covered by the invoice or the amount paid.

 (d)  (1) Tax, whether general or special, becomes due on imported goods at the clearance stage subject to the tax rate

             in effect at the time when the Customs Declaration is registered.

      (2) Tax, whether general or special, due on imported goods, shall be paid prior to the release of goods in

           accordance with the procedures stated under the Customs Law unless otherwise required by this Law.

 (e) (1) Tax becomes due on an imported service when payment for this service is made, wholly or partially. The

            recipient or beneficiary there from shall be required to pay the tax due to the Department.

      (2) For the purposes of this paragraph, the term "imported services" includes services performed in the kingdom by

            non-resident persons or by foreign firms or associations that have no branches working in the kingdom.

 (f)  Tax, whether general or special, shall be payable on goods and services in the free zones, cities and duty free  

      shops when they are used for private purposes or non-business purposes irrelevant to the business operations

      licensed inside these free zones, cities and duty free shops.

 (g) Apart from the cases provided for under this Article, the Minister may, by instructions and for reasonable grounds, determine the tax point in relation to the supply of goods or services, including the case where goods or services are supplied for a consideration to be determined periodically, from time to time, at the end of a certain period or after the goods have been used.

Article (10)
 

The following shall not be subject to tax:

(a) Supply of goods or services if made after they have been used for private purposes or for other purposes unrelated

     to the taxable business licensed by the taxable person according to this Law, unless he has already claimed the tax

     charged on these goods or services.

(b) Supply of immovable properties .

(c) Supply of shares and stocks of companies, investment funds and securities of all kinds.

(d) Amounts received by officials, employees and workers in return for their services or for whatever associated with

     their services in ministries, governmental departments, official institutions and other public bodies; and all amounts

     earned by employees and workers for their work or for whatever related to their work with their employers,

     including bonuses, remunerations and other sums paid to board members of the corporate bodies.

(e) Goods and services imported by businesses established in the free zones, cities and duty free shops within the limits

     required to meet their purposes according to their own legislations, provided that amiability to tax be limited to their

    operations carried out in these free zones, cities and duty free shops.

(f) Goods and services exported outside the kingdom from the free zones, cities and duty free shops.

Article (11)
 

  In case where a business related to a taxable goods ceases or is liquidated, tax shall be payable on such goods that shall revert to the legal successor at the time of disposal unless such successor is already registered or has himself then registered in accordance with the provisions of this Law.

Article (12)
 

  Goods and services deemed to be contraband or breaching to the provisions of this Law shall be liable to tax at the rates in effect on the date the contraband or violation took place. However; should this date be unidentifiable, then tax rates in force at the time the contraband or violation was apprehended shall be applicable