Value Added Tax

The unified VAT agreement for the GCC treaty for a unified framework agreement to introduce VAT came into application. In line with the framework, Saudi Arabia is introducing Value Added Tax (VAT) on 1st January 2018. The introduction of VAT is a key part of the Kingdom's broader plan to improve fiscal sustainability and diversify government revenues.

In line with this approach, the value added tax will be applied starting from (01 January 2018) at a rate of 5% on all services and products provided by Mobily according to the applicable requirements of each product individually.

How to apply VAT on Mobily products?

VAT is applied to all products and services provided by Mobily depending on the classification of each product.

Postpaid Products:

  • VAT will be applied for all postpaid voice & data packages.
  • VAT will be rated of 5% depends on the monthly due amount that is reflected in the monthly bill at the beginning of each month.

Prepaid Packages :

  • For New Customers: VAT is applied and will be deducted from the initial balance.
  • for  Existing customers:  VAT is applied and will deducted from the recharge amount 

Recharge Card:

VAT will applied in all the recharge cards 

Recharge Price VAT Recharge After VAT
SR 10 Card 0.48 9.52
SR 15 Card 0.71 14.29
SR 20 Card 0.95 19.05
SR 30 Card 1.43 28.57
SR 50 Card 2.38 47.62
SR 100 Card 4.76 95.24

Data SIM cards and Data Vouchers:

ِAll price of the data SIM cards and data Vouchers are VAT inclusive.

Fiber optics service (eLife Connect):

All fiber optics services (eLife connect packages) are subject to VAT as per the requirements of the General Authority for Zakat and Tax.

Below are the detailed VAT implementation rules for all eLife connect packages and services.

eLife Connect Postpaid Packages:

Monthly subscription fees for eLife connect Postpaid packages will be subject to VAT 5%

The below table illustrate the monthly fees after including VAT starting 01/01/2018:

Package Download Speed Upload Speed Monthly fees
25 MB 25 Mbps 5 Mbps 313.95 SAR
50 MB 50 Mbps 10 Mbps 418.95 SAR
100 MB 100 Mbps 15 Mbps 523.95 SAR
200 MB 200 Mbps 25 Mbps 838.95 SAR

eLife Connect Prepaid packages:

eLife connect prepaid new subscriptions and renewal fees will be subject to 5% VAT.

The below table illustrate the subscription and renewal fees after including VAT starting 01/01/2018.

Package Price Price/ 3 Months Price/ 6 Months Price / 12 Months
25 Mbps 314 SAR 867 SAR 1,565 SAR 2,783 SAR
50 Mbps 419 SAR 1,155 SAR 2,090 SAR 3,728 SAR
100 Mbps 524 SAR 1,449 SAR 2,610 SAR 4,662 SAR
200 Mbps 839 SAR 2,310 SAR 4,179 SAR 7,455 SAR

Q&A:

Q1: I subscribed to eLife connect postpaid package within 2017 and got a promotional discount as part of my contract, are my monthly fees subject to VAT?

Yes, all fees for eLife connect postpaid packages are subject to VAT including the discounted packages starting 01/01/2018.

Example: A customer is subscribed to eLife connect postpaid package over a speed of 25MB with discounted monthly fee of (200 SAR Monthly). The discounted monthly fee is subject to VAT and will be 210 SAR Monthly Including VAT.

Q2: Is the relocation fee to a new home subject to VAT?

Yes, the relocation fee will be subject to VAT, becoming 630 SAR starting 01/01/2018, including both postpaid and prepaid packages.

Q3: I signed a contract for eLife connect postpaid recently, and the contract states a 12 Months commitment. How the early termination fees will be calculated if I canceled the service prior to the stated ending date during 2018?

Early cancelation fee is subject to VAT as illustrated in the below example:

eLife connect postpaid service was activated for the customer in 01/10/2017 and the customer asked to cancel the subscription by 01/06/2018. The early cancelation fee is going to be calculated for the remaining 3 Months of the contract for (85 SAR for each remaining month) as in the below:

85*3 = 255 SAR and it is subject to VAT (5%) to be (267.75 SAR)

Q4: I renewed my eLife connect prepaid subscription during December 2017 and my subscription will expire during 2018, is the renewing of the subscription subject to VAT?

If the subscription was renewed before 01/01/2018 there will not be VAT charges.

Add on Services:

  •  Postpaid lines : VAT will be applied in all add on services which mean the services with non- recurring charges that cause an increase in the amount of the bill
  • Prepaid lines: if the customer using the existing balance, VAT will not be applicable, but if the customer paying through credit card or SADDAD, additional 5 % VAT will be applicable.

General Quotations:

  • What is Value Added Tax (VAT)?

Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses.  Saudi Arabia is committed to impose VAT with effect from January 1, 2018 (Rabi Al-Thani 14, 1439).

  • What is the VAT amount?

It is additional standard rate of 5% of your monthly due amount that is reflected in your monthly bill

Postpaid Services:

  • Does VAT apply on Mobily Postpaid package customers?

Yes, it is applied for all Mobily Postpaid voice & data customers.

  • Is the VAT applied for the package monthly fees only?

No, it is applied for the monthly fees and any additional usages and adds on services that you have consumed during the month.

  • Is the VAT amount fixed every month?

No, it is not as it is depends on your monthly due amount that is reflected in your monthly bill.

  • Is the VAT applied for all services and packages?

No, it is applied for the charged services only. So any service you have it in your package as free will not be charged for VAT

  • How can I know the VAT amount for my monthly bill?

The VAT amount will be rated of 5% depends on the monthly due amount that is reflected in the monthly bill.

  • How much is the increase that I have to pay every month?

It depends on the postpaid package that you have. Below are some examples:

Example 1:

Before Applying VAT After Applying VAT (starting from 1/Jan/2018)
Package Name Monthly Fee Add on Service Due Amount Total Amount Package Name Monthly Fee Add Service Due Amont Total Amount
Wajid 200 200 SAR 0 SAR 200 SAR 200 SAR Wajid 200 200 SAR 0 SAR 200 SAR 200+10(VAT)=210 SAR

Example 2:

Before Applying VAT After Applying VAT (starting from 1/Jan/2018)
Package Name Monthly Fee Add on Service Due Amount Total Amount Package Name Monthly Fee Add Service Due Amont Total Amount
Wajid 400 400 SAR 0 SAR 400 SAR 400 SAR Wajid 400 400 SAR 0 SAR 400 SAR 400+20(VAT)=420 SAR
 

 

Example 3:

Before Applying VAT After Applying VAT (starting from 1/Jan/2018)
Package Name Monthly Fee Add on Service Due Amount Total Amount Package Name Monthly Fee Add Service Due Amont Total Amount
Wajid 400 400 SAR 20 SAR 420 SAR 400 SAR Wajid 400 400 SAR 20 SAR 420 SAR 400+21(VAT)=441 SAR
 

 

  • I am Wajid Plus customer and I subscribed in 5 GB data bundle “add on”, How much is going to be my monthly bill?
  • Your package monthly fee is 150 SAR
  • The 5 GB data add on price is 25 SAR

Therefore, you need to pay Mobily the following:

Package Name Monthly Fee Data add on ( 5 GB) Due Amount Total Due Amount ( including VAT)
Wajid Plus 150 SAR 25 SAR 175 SAR 175+8.75 (VAT)=183.75 SAR

 

Prepaid Services:

  • Does VAT apply on Mobily Prepaid package customers?

Yes,
 For new lines: the VAT is applied and will be deducted from the initial balance, for more clarification kindly check this sample:

Package Name Activation Price Setup fee initial balance before (VAT) initial balance (including VAT)
7ala19 30 SAR 5 SAR 25 SAR 25-1.43 (VAT)=23.57 SAR
Hajj & Omra 30 SAR 5 SAR 25 SAR 25-1.43 (VAT)=23.57 SAR

For existing lines: Yes, and the VAT will be deducted from the recharge amount.

 

Data SIM cards and Data Vouchers:

Do I have to pay VAT on top of the Data SIM cards and Data Voucher prices?

All prices of data SIM cards and data voucher are VAT inclusive.

Add- Ons Services:

Do I have to pay VAT when I activate data add-ons?

  • If you are using your existing balance, VAT will not be applicable since VAT was deducted from your credit.
  • If you are paying through Credit Card or Sadad, additional 5% VAT will be applicable.

 

Recharge Vouchers:

Explain how VAT is calculated when the customer used the recharge card

 

Recharge Price VAT Recharge After VAT
SR 10 Card 0.48 9.52
SR 15 Card 0.71 14.29
SR 20 Card 0.95 19.05
SR 30 Card 1.43 28.57
SR 50 Card 2.38 47.62
SR 100 Card 4.76 95.24

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