Article 58 - Non-deductible Input Tax

A. Input Tax charged for purposes other than his Economic Activity or relating to Goods or Services intended for personal or recreational use shall not be deductible by the Taxable Person, including:

1. Tax paid in relation to the provision of recreational Services to individuals, such as hospitality and Accommodation Services, food and drink, which are not provided in the normal course of business.

2. Tax paid in relation to accessing events or functions, and for trips for recreational purposes.

3. Tax paid in relation to Goods and Services used by employees free of charge and for their personal use, with the exception of any Tax paid as a result of an obligation under any other laws applied in the Kingdom.

B. Input Tax relating to vehicles provided by a Taxable Person to his employees shall not be deductible, except in proportion to their use for business purposes. The provisions of this paragraph shall apply to Input Tax on Supplies associated with such vehicles such as maintenance, repair and insurance Services.

The controls and conditions of deducting Input Tax related to vehicles shall be determined by a decision of the Chief Executive Officer the Bureau.

C. The provisions of Paragraph B of this Article shall not apply to the following categories of vehicle:

1. Vehicles that are rented by rental companies.
2. Vehicles registered and used for emergency purposes such as police cars, ambulances, fire engines.
3. Taxis and buses licensed by the Ministry of Transportation and Telecommunication.
4. Buses, trucks, cranes and other similar vehicles that can only be used in the course of an Economic Activity.