Will there be a common system of VAT registration so you can check whether you are dealing with a taxable person?

The GCC Agreement envisages an electronic matching system for intra-GCC systems. In practice, we do not think this system will be available for a while and so it is likely a VAT number checking system will be made available country by country.

Source: Deloitte

Will associations of persons (e.g. open consortium) be considered as a taxable person?

Whilst the GCC Agreement does make reference to companies being able to form VAT groups, it does not specifically confirm the legal form required to be VAT registered.

Source: Deloitte

Who can I contact for clarifications for VAT Related Queries?

For clarification on requirements or all VAT-related queries, please call toll free number 19993. The hotline is open from 7 am to 11 pm Saturday to Thursday.

Changing my business systems for VAT reporting will cost money. Can the government help?

When VAT is introduced, the government will provide information and education to businesses to help them make the transition. The government will not pay for businesses to buy new technologies or hire tax specialists and accountants. That is the responsibility of each business. We will, however, provide guidance and information to assist you and we are giving businesses time to prepare.

What are GAZT and the government of Saudi Arabia doing to prepare for the introduction of VAT?

Ongoing activities at GAZT are focused on a number of key areas, including finalizing the policy, inter-governmental coordination, building GAZT’s own capabilities and systems to handle the increased workload of VAT, and preparing awareness and education programs for businesses and the public.

How do I ensure that VAT does not impact my business profitability?

By ensuring your business is fully prepared for the introduction of VAT, it should be possible to minimize the financial and operational impact. For example, via adoption of the widely available accounting software, cash register terminals and point-of-sale tools along with a bank account will allow for efficient processing.

Where can I find additional information on the introduction of VAT? click to expand contents
What are GAZT and the government of Saudi Arabia doing to prepare for the introduction of VAT? click to expand contents

What are the responsibilities of businesses related to VAT?

In addition, businesses will need to ensure timeliness and completeness of their financial and business records. This includes collecting invoices and accounting for the goods or services bought and sold as well as the VAT paid and charged.

How do I know if my business needs to pay VAT?

All businesses with an annual revenue of sales of VAT taxable goods and services of 375,000 SAR or above will need to register for VAT with the General Authority for Zakat and Tax. Businesses which are below this threshold but still generating revenue of at least 187,500 SAR annually can voluntarily register for VAT.

Businesses that provide goods and services which are not subject to VAT are not required to register for VAT.

More information about the registration process and associated timelines will be communicated in the coming months.

Will the VAT cover all the goods and services?

All goods and services will be subject to VAT. However, some goods and services will be exempt. These details will be decided in the coming months before VAT is introduced.