1) A Nominal Supply of Goods or services, made by a Taxable Person is treated as a Supply of Goods or services by the Taxable Person for Consideration as part of the Taxable Person’s Economic Activity, except as otherwise provided by this article.
2) A Supply of Goods without Consideration is not treated as a Nominal Supply in any of the following situations:
a) a Taxable Person Supplies gifts or samples to promote its Economic Activity, provided the Fair Market Value of each gift or sample supplied without Consideration does not exceed two hundred (200) riyals exclusive of VAT per recipient per calendar year,
b) a Taxable Person provides Goods to its employees as a part of carrying on its Economic Activity, provided the Fair Market Value of the Goods supplied without Consideration does not exceed two hundred (200) riyals exclusive of VAT per recipient per calendar year.
3) The maximum annual value of Supplies of gifts, samples and Goods which a Taxable Person may make without Consideration and still be eligible to apply the relief in the first paragraph of this article, is fifty thousand (50,000) riyals in any calendar year based on the Fair Market Value of those gifts, samples and Goods.
4) In cases where Goods are not used for the Economic Activity of a Taxable Person due to the destruction, theft or loss of those Goods the Taxable Person does not make a Nominal Supply of those Goods.
5) A Supply of services is not treated as a Nominal Supply in cases where a Taxable Person Supplies services without Consideration, and these services are provided to promote the Economic Activity of a Taxable Person or provided to employees in as a part of carrying on the Economic Activity, provided the Fair Market Value of each Supply of service does not exceed two hundred (200) riyals per person per calendar year.
6) The maximum annual value of services which a Taxable Person may make without Consideration and still be eligible to apply the relief in the fourth paragraph of this article, is fifty thousand (50,000) riyals in any calendar year based on the Fair Market Value of those services.
7) The Nominal Supply made on ceasing an Economic Activity will take place on the date of deregistration and be based on the Fair Market Value of the Goods retained at this date.
8) In cases where the Taxable Person only deducts a part of the Input Tax on the purchase of Goods and services or Import of Goods directly linked to any Nominal Supply, the value of the Nominal Supply will be adjusted to reflect only the proportional amount of VAT deducted.
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