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.

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Key components include:

Saudi Arabian VAT registrations

  • 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

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