Saudi Arabia VAT

Saudi Arabia implemented a Value Added Tax regime on 1 January 2018. This was based on the Gulf Co-Operation Council's VAT Treaty, which sets the broad parameters for the role out of VAT across its 6 member states.

• Resident and non-resident businesses performing taxable supplies must register with the tax authorities within 20 days of passing the VAT registration threshold. Businesses most evaluate if they have exceeded the threshold on a monthly basis
• The registration threshold is SAR375,000
• VAT registrations may back or forward dated
• Zero-rated or ‘gift’ supplies will not count towards the VAT registration threshold; but supplies received under the reverse charge will
• Voluntary VAT registrations for businesses under the annual threshold will be permitted
• VAT registration applications are made electronically, with the following information:
  • Name of business, including ID information
  • Address of business, including email contact details
  • Commercial registration numbers
  • Date of VAT registration
  • Value of annual taxable supplies

• Anti-splitting rules are included, designed to prevent avoiding the VAT registration threshold
• Non-resident tax payers may use a tax agent or register directly
• Non-residents must appoint a Tax agent, who must be approved by the tax authorities
• Tax agents are joint and severally liable for the tax payer’s VAT liabilities
• VAT Group registrations, where connected businesses apply for a single, combined registration and ID are permitted. The criteria for this includes:
  • Only resident businesses
  • Common control of the businesses
  • As least one of the businesses must be eligible for VAT registration in their own right
  • One of the businesses will be nominated as the reporting entity

• VAT deregistrations are required where the taxable supplies cease, or fall below the annual VAT registration threshold