This Resolution by the Zakat, Tax and Customs Authority Board of Directors amends Article 39 of the Implementing Regulations of the Value Added Tax Law. It refines the valuation rules for specific transactions, primarily deemed supplies. The update establishes that the value of such supplies shall be the purchase price or cost. If this is not determinable, the fair market value applies, referencing the rules in Article 38. Furthermore, it clarifies that payments from a government entity to a supplier are not considered subsidies if they represent consideration for goods or services supplied to that entity.
Chapter 7 - Value of Taxable Supplies
Article 39 - Value of Certain Supplies Subject to Tax
The deemed value of supplies that are treated as a supply transaction in accordance with the provisions of the Agreement, the Law, and the Regulations shall be the purchase price or the cost. In cases where it is not possible or appropriate to determine the purchase price or cost, the value of such supplies shall be the fair market value applicable on the date when the deemed supply occurs, and in accordance with the rules for determining the fair market value specified under the provisions of Article 38 of this Regulation.
Amounts paid by a government entity to a supplier shall not be regarded as a subsidy if such amounts, or any part thereof, constitute consideration for the supply of goods or services to that government entity.
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