Michaela Merz

Saudi Arabia – VAT registration in KSA will start in September 2017

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In brief

Saudi Arabian General Authority for Zakat and Tax (GAZT) announced that VAT registration will start in September 2017 and deadline for registration will vary depending on the size of the potential taxable businesses.

This announcement was made on a new portal for Value Added Tax (VAT) launched by GAZT. It offers the potential tax payers additional information on KSA VAT. The portal is currently available in Arabic and English and is accessible through the following link: https://www.vat.gov.sa/en/

In detail

The new portal offers access to essential information and features that provides information on VAT in KSA. In the website, GAZT has highlighted and elaborated on a lot of crucial areas such as:

  • Technical FAQ – GAZT has provided technical responses on some common VAT related questions.
  • VAT registration – Registration will officially be launched in September 2017. Tax payers that make/intend to make annual taxable supplies of goods and services in excess of SAR 375,000 are required to register for VAT by 20th December 2017.
  1. However, tax payers whose annual taxable turnover is/is intended to be between SAR 375,000 and SAR 1,000,000 have until 20 December 2018 to register.
  2. GAZT has announced that large tax payers that make/intend to make annual taxable sales of SAR 40 million and above (either based on the past twelve months or on the twelve months to come) may be VAT registered automatically and should receive respective notification from GAZT.
  3. KSA tax payers may voluntarily register for VAT only if their annual taxable sales exceed/intend to exceed SAR 187,500.
  4. No threshold is set for VAT registration of non-residents.
  5. The registration will be done online through GAZT’s portal.
  •  Taxpayer charter – Provides guidance on the standards that are expected from GAZT and tax payers.
  • Preparing your business –Provides guidance on the requirements for large and SME businesses to become VAT ready by the go-live-date.
  • VAT e-Services – Provides information in relation to VAT registration, group registration, VAT returns and system readiness tool.

The takeaway

Taking into consideration that the registration for VAT will start in September 2017, KSA businesses as well as GCC and non-resident businesses will need to:

  • check their VAT registration requirements with GAZT (for large KSA businesses)
  • assess if they must (or voluntarily want to) get VAT registered in KSA
  • decide if they want to create a VAT group in KSA
  • prepare documentation certifying their current and prospective annual volume of taxable sales and expenses
  • decide on a tax representative (for GCC and non-resident businesses)
  • arrange submission of information requested through the GAZT’s portal
  • obtain VAT certificate
  • ensure their VAT identification number will be reflected on all VAT invoices issued, starting from 1 January 2018
  • provide the VAT identification number to the VAT registered suppliers so they may start issuing VAT invoices using it from 1 January 2018, and
  • request and validate VAT registration data from suppliers

If you have any questions, please do not hesitate to contact Nassim Tanouti on +971 566 816 561 or nassim.tanouti@pwc.com.

 

Bildquelle: Tim Reckmann  / pixelio.de

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