Saudi Arabia VAT rise today - transitional rules
- Jul 1, 2020 | Richard Asquith
From 1 July 2020, the Saudi Arabian Value Added Tax rate will rise from 5% to 15%. This was announced on 11 May 2020 to help the Gulf state business manage VAT rate charges and reporting over the period of the change.
Key points on the rules for VAT invoice issuers are below. Customer must ensure their purchase invoices reflect these rules are it will affect their right to deduct any VAT paid.
- Contracts signed before 20 May for continuous supplies continuing after 1 July may continue to charge 5% until the earliest of: end of the contract or 30 June 2021.
- Contracts for continuous supplies signed after 11 May may only continue to charge 5% until 30 June 2020.
- Invoices issued prior to or after 11 May for supplies which take place before 1 July may still charge 5% VAT. Any supplies after 30 June must be reinvoiced at 15%.