Questions & Answer

VAT in the contracting activity

Subject to the Value Added Tax Law No. 67 of 2017, as well as professional and advisory services.

First: Professional and consulting services

Services of a non-commercial or industrial nature, Performed by the natural or legal person independently, The key element is work

1- Professional and advisory services shall be subject to the table tax at 10% of the value according to the text of the serial No. (12) of the first item "Goods and services for the table tax only" of the table attached to the VAT Law No. 67 of 2016

The value herein means the value actually paid for the service. This section does not cover the services of artisans. The performers of these services do not have a registration limit under the VAT law.

2. The tax payable on the inputs of such services shall not be deducted from goods and services

In the event that more than one registrar performs the service for one beneficiary, payment of one of the table tax due on this service shall be considered as payment of the table tax for that service, provided that the value of what the registrar pays shall not be less than the value of the table tax due on this service.

Second: Contracting

With the issuance of the Value Added Tax Law No. 67 of 2016, paragraph (9) of item I of the Schedule of Goods and Services accompanying the Law included the following:

1 - Contracting and construction works (supply and installation) are subject to the table tax at a rate of 5% of the value of the extract of the approved consultant and the settlement of the previous table tax paid by the subcontractor of the schedule tax paid by the general contractor for the same works

The second paragraph of Article (11) of the law stipulates that "the prices of contracts shall be amended between the taxpayers or between the parties of one of them, which are valid at the time of taxation or when their category is amended with the same value as the tax stupidity or amendment."

Consequently, all contractors (general contractor and subcontractor) are addressed by the provisions of the law and they must apply to register with the Authority whatever the size of their transactions

2- In case the contractor performs only supply or installation works, such works shall be subject to VAT at 13% from the date of enactment of the law until 30/6/2017 and as of 1/7/2017 and thereafter, the general price of the tax shall be 14%.

More information can be found here