Rule Book

August 5, 2017: KSA makes amendments to VAT Law

The Royal Decree No (M / 113) dated 2/11/1438H (25 July 2017) has amended Articles 56 (tax administration), 66 (objection and appeal) and 67 (formation and function of preliminary objection and appeal committees) of tax laws.

Tax administration [Article 56]

  • The General Authority of Zakat and Tax (GAZT) will be responsible for the administration, inspection, assessing, collection of income tax and imposition of penalties under the tax laws.
  • The penalty shall be imposed only by the Governor and a person authorized by the Board of Directors of the GAZT.

Objection and appeal [Article 66]

  • The number of days allowed for filing appeal against the assessment and appellate order has now reduced from 60 to 30 days.
  • The additional liability on the items accepted by the taxpayer shall be settled before filing the appeal.
  • The amended provisions of tax laws are silent on the timing of settling of liability under dispute, whereas under the earlier provision of tax laws, the disputed liability was required to be paid or an equivalent amount of bank guarantee submitted before filing the appeal with the Higher Appeal Committee.
  • Article 66(f) referring to the appeal before the Board of Grievance (BOG) has been deleted. Consequently, an appeal cannot be further filed with the BOG and the decision of the Higher Committee of Tax for Conflict and Dispute (HCTCD) will be considered final.

Formation and  function of preliminary objection and appeal committees [Article 67]

  • Reform in the Appeal Committees structure by forming two Committees namely:
  • Settlement Committee of Tax for Conflict and Dispute  (SCTCD)
  • Higher Committee of Tax for Conflict and Dispute (HCTCD)
  • The HCTCD will prepare the rules for both Appeal Committees within sixty days of the appointment of members of HCTCD. Thereafter, these rules will be finally issued by a Royal Decree.
  • The SCTCD and HCTCD will not hear any appeals filed after five years of due date of liability under dispute or from the date of notification unless there is a valid reason acceptable to the Appeal Committees.
  • The present structure of the Preliminary and Higher Appeal Committees will continue until the new Appeal Committees are constituted under the amended provisions of the tax law.

Previous Updates

July 28, 2017: KSA has published its final VAT Law

KSA has approved and published the final KSA VAT Law in the official Gazette Umm Al Qura Edition 4681 on 28th July 2017. It has 18 Chapters and 53 Articles.

Businesses should ensure registration before 27 August 2017

The Kingdom of Saudi Arabia final VAT law is available on their site www.uqn.gov.sa on this link

Some of the key highlights of the VAT law are listed below:

  • All imports and supplies of goods and services in the KSA will be subject to VAT, according to Article 2.
  • VAT will become effective in the KSA in the beginning of the next fiscal year, that is, January 1st, 2018.
  • A hefty fine of SAR 10,000 will be applicable to businesses that fail to apply for the registration within the specified period, according to Article 41.
  • Article 53  states that all persons liable to the VAT will have to register with the General Authority for Zakat and Tax (GAZT) within 30 days of the date of issuing the law, that is 30 days from July 28, 2017)

July 23, 2017: A Draft of the Regulations was released. A copy of the Draft Regulations may be downloaded here

Earlier to this a draft law was circulated for public discussion.
You may download a copy by clicking here