Announcements

Saudi Arabia to Begin e-invoicing Phase II from January 2023

date: 20221116

Organized By: Arab News

External URL: https://www.arabnews.com/node/1980221/business-economy

Riyadh November 16, 2022:

Having only introduced VAT on 1 January 2018, Saudi Arabia is leading the way in digitizing its tax invoices. The Zakat, Tax and Customs Authority (ZATCA) has given January 1, 2023 as the go-live date of the second phase.

Phase I consisted of ensuring that there is a technical e-invoicing solution compatible with the relevant requirements. This puts an end to handwritten invoices or invoices written through text editors. A fine of SR 5,000 will be applied for not issuing and saving the invoices electronically.

Phase II of e-invoicing will be implemented in a phased manner from January 2023, to establish integration between e-systems of taxpayers and the authority’s regulations. In addition to other requirements, Phase II introduces integration with ZATCA platform for continuous transaction controls requiring taxpayers to clear invoices ahead of transmission to buyers. The fine for omitting the QR Code and not reporting any malfunction in the issuing of the e-invoice to the authority starts with a warning. The fine for violating the deletion or modification of e-invoice starts from SR 10,000.

Read more.

ZATCA issues Guideline on Control of Fees for Storage at Land Customs Ports

date: 20221103

Organized By: Zakat, Tax and Customs Authority

External URL: https://uqn.gov.sa/?p=18306

Riyadh November 3, 2022:

ZATCA recently issued a guideline on the ‘Controls of fees for storing goods at land customs ports’. The guideline is in accordance with the unified customs regulations of the GCC.

Click here to read the full guideline.

ZATCA issues Fatoora Portal User Manual – Version 2

date: 20221022

Organized By: Zakat, Tax and Customs Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/2022-10-13-Fatoora-Portal-User-Guide.pdf

Riyadh October 22, 2022:

ZATCA has issued a user guideline for the Fatoora platform to implement the second phase of the electronic invoice – the integration phase. ​​​​

This user manual contains the steps of using the portal to onboard and integrate the e-invoicing solutions and has been prepared for educational and awareness purposes.

View the Fatoora Portal User Manual- Ver 2.

ZATCA: Items Worth over SAR 60,000 to be Disclosed during Travel

date: 20221018

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/625350/SAUDI-ARABIA/Passengers-are-required-to-disclose-if-they-are-carrying-SR60000

Riyadh October 18, 2022:

The Zakat, Tax and Customs Authority (ZATCA) stated that every traveller arriving or departing from the Kingdom of Saudi Arabia must disclose if they are carrying in their luggage a sum of or items amounting to 60,000 Saudi Arabian Riyals (SAR) or more.

Travelers must disclose the items and fill out the declaration form and submit it electronically via the application or through ZATCA’s website.

The items that may have a value of more than 60,000 SAR include:

  • Coins
  • Monetary instruments
  • Gold bars
  • Precious metals
  • Precious stones
  • Fine jewellery
  • Equivalent in foreign currencies


ZATCA said that the declaration is a mandatory requirement to protect the traveler from being charged with the crime of money laundering, smuggling, or evading the payment of legal fees and taxes.

For more information, click the link: https://e-services.zatca.gov.sa/en/declare

Read more.

ZATCA releases VAT Guidelines for Electronic Contracts

date: 20220926

Organized By: Zakat, Tax and Customs Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/2022-09-26-VAT-guidelines-electronic-services.pdf

Riyadh September 26, 2022:

ZATCA releases VAT Guidelines for Electronic Contracts. The guideline is addressed to all natural and legal persons who carry on economic activity and who are subject to VAT. The purpose of this guideline is to provide more clarifications regarding VAT consequences on electronic contracts entered into between a supplier and a customer. View the Guide in Arabic.

For further advice on specific transaction, you can approach the Authority on its website which contains a host of tools and visual guidance materials.

ZATCAs 2 hours Customs Clearance Initiative continues its efforts

date: 20220920

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/News_945.aspx

Riyadh September 20, 2022:

The Zakat, Tax and Customs Authority (ZATCA) has concluded making all the necessary preparations to expand the application of the customs clearance initiative within the two hours specified by the noble royal order and has worked on this in collaboration with 26 government agencies that serve as customs clearance agencies.

The Authority is expanding the implementation of the initiative in order to further the clearance system’s efforts to facilitate cross-border trade in line with the goals of the Kingdom’s Vision 2030 to become a global platform for logistics service.

According to the Authority, importers’ can utilize the feature of pre-submitting the documents needed for importation 72 hours before the consignment arrives at the port, in addition to meeting all clearance requirements from the relevant authorities, and contribute to the accomplishments made during the final stage of the clearance system.

In this regard, the Authority, through its integrated work with the National Competitiveness Center and in continuous cooperation with the clearing authorities, has achieved a tangible development at the level of customs clearance procedures within the framework of its strategy that meets the requirements of the Kingdom’s vision 2030 to be a pioneer in customs work at the regional and global level, fostering national competitiveness and enhancing national competitiveness.

Read more.

VAT of a Car Exported from Saudi Arabia cannot be Refunded

date: 20220910

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/624404/SAUDI-ARABIA/VAT-of-a-car-exported-from-Saudi-Arabia-cannot-be-refunded

Riyadh September 10, 2022:

Zakat, Tax and Customs Authority (ZATCA) clarified that it’s not possible to refund the paid value-added tax (VAT) on a car that has been exported from the Kingdom of Saudi Arabia. This clarification came while responding to an inquiry from a Saudi citizen asking about the possibility to receive VAT refund after he purchased a car, then exported it from the Kingdom.

He was asked to get a VAT refund in Saudi Arabia after he paid another new VAT in the country to which he exported the car to.

It stated that all the services and commodities are subjected to the VAT with a percentage of 15 percent if it has been provided by the establishment or by an activity or business owner registered in the VAT system.

Read more.

ZATCA signs MOU with Hungarian National Tax and Customs Authority

date: 20220905

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_942.aspx

Riyadh September 5, 2022:

The Zakat, Tax and Customs Authority (ZATCA) signed a Memorandum of Understanding (MOU) on tax administration with the Hungarian National Tax and Customs Authority. The MOU was signed by His Excellency the Governor of ZATCA, Eng. Suhail bin Muhammad Abanmi and Mr. Ferenc Fagogeli, Minister of State at the Ministry of Finance and Commissioner of the National Tax and Customs Authority of the Republic of Hungary.

The memorandum includes a general framework for cooperation in the field of tax administration between the two countries. It also discusses ways for cooperation in a number of fields notably in digital solutions, and review of experiences of both sides in tax applications.

This memorandum comes within the framework of the Authority’s endeavor to strengthen its strategic relations at the international level for upgrading tax system and its services.

Read more.

ZATCA launches Public Consultation document on Amendments to Excise Tax Regulations

date: 20220829

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/RulesRegulations/Taxes/Documents/RETT%20Implementing%20Regulation.pdf

Riyadh August 29, 2022:

A draft of the proposed amendments to the RETT Regulations was issued by ZATCA on 27 June 2022 for public consultation on the National Competitiveness Centre platform.

Zakat, Tax and Customs Authority’s (ZATCA) board of Directors approved all the proposed amendments to various Articles of the Real Estate Transaction Tax (“RETT”) Regulations without any changes. Click here to access the official announcement. Also view the RETT Regulations with approved amendments.

ZATCA has also issued a new version of the RETT Implementing Regulations (in Arabic) after incorporating the approved amendments. Click here to view the entire document.

ZATCA Tightens Custom Controls to curb smuggling of Narcotics

date: 20220816

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_934.aspx

Riyadh August 16, 2022:

During a stringent inspection schedule, the Zakat, Tax and Customs Authority (ZATCA) thwarted an attempt to smuggle 1,100,000 narcotic pills, after finding it hidden in a toys and clothes consignment received through the port of Jeddah Islamic Port.

In coordination with the General Directorate of Narcotics Control, the 5 culprits were arrested right on time. All thanks to the Authority’s efforts, which asserted that it will continue to tighten customs control over the Kingdom’s imports and exports through all its customs outlets, in order to achieve security and protection of society from malpractices.

At the same time, the authority also called on citizens and residents to contribute to combating smuggling in all its forms by communicating any such violations to its hotline 1910 OR 00966114208417 or via e-mail 1910@zatca.gov.sa. Through these channels, the authority receives reports related to smuggling crimes in complete secrecy and will bestow a financial reward to whistleblowers if the notified information is accurate.

View more.

KSA: ZATCA issues Simplified Guide on E-invoicing requirements

date: 20220811

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/E-Invoicing/Introduction/Guidelines/Documents/E-invoicing%20Detailed%20Technical%20Guidelines.pdf

Riyadh August 11, 2022:

The Zakat, Tax and Customs Authority (ZATCA) of KSA has issued a Simplified guide on E-invoicing requirements in English. The guide aims to provide the taxpayers an overview of the E-invoicing implementation in the Kingdom and its requirements to facilitate their readiness for first and second phase.

The guide acts as a guide for users to understand the taxpayer’s user journey in preparing and successfully onboarding their E-invoice systems, and complying with the E-invoicing regulations with respect to cleared and reported invoices.

View the E-invoicing Detailed Technical Guidelines

Also view the Simplified Guide for E-invoicing Requirements

ZATCA initiates Procedures for Implementing Phase II of E-invoicing Project

date: 20220727

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/News_912.aspx

Riyadh July 27, 2022:

Zakat, Tax and Customs Authority (ZATCA) clarified that it has started the procedures for implementing Phase II (Integration Phase) of E-invoicing. This phase aims to integrate E-invoicing solutions of taxpayers with ZATCA’s platform -FATOORA, where the authority will inform targeted taxpayers to complete procedures for implementing the second phase.

ZATCA has revealed that the implementation of Phase II of the E-invoicing project will begin on January 1, 2023, with selected taxpayers in the first wave. The selection was based on the revenue subject to VAT for the year of 2021 exceeding 3 billion SAR.

ZATCA stated that Phase II requires additional requirements, the most prominent being the integration of taxpayer’s E-invoicing solutions with FATOORA, issuance of electronic invoices in a specific format, and inclusion of additional fields in the invoice. Furthermore, the procedure of E-invoicing would occur gradually in waves, and ZATCA would inform the requirements directly at least six months prior to the integration date.

Read more.

ZATCA sets 15th July as deadline to submit excise tax returns for last May and June

date: 20220712

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_919.aspx

Riyadh July 12, 2022:

The Zakat, Tax and Customs Authority (ZATCA) has requested all taxpayers from the business sector subject to selective goods tax to submit their tax returns for the months of the last May and June. The deadline for submission is set on the fifteenth of this month without fail.

The Excise Goods Tax in force in the Kingdom is imposed on goods that have a negative effect on public health or the environment at varying rates and the list includes soft drinks, energy drinks, sweetened drinks, and tobacco and its derivatives.

Taxpayers can submit their declarations quickly through the website (zatca.gov.sa), in order to avoid the penalties for non-submission within the specified period. The fines are at the rate of 5% of the value of the tax that should have been declared for each month’s delay in submitting the declaration.

Read more.

ZATCA denies rumors on VAT Exemption Certificate

date: 20220630

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/622375

Riyadh June 30, 2022:

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) have denied the existence of a value-added tax (VAT) exemption certificate.

The Authority clarified that all business owners in the region who engage in economic activities are to obligatory register in the VAT system if their annual revenues reach the mandatory limit, which is SR 375,000. However, business owners who engage in economic activities and whose annual revenues are less than SR 187,500 are not obligated to register.

The Authority also clarified that businesses whose annual revenues exceed SR 187,500 but do not exceed SR 375,000 are eligible for the optional VAT registration.

If revenue touch the mandatory registration threshold, then business owners are required to register within 30 days.

Read more.

ZATCA released an Updated Draft of the e-Invoicing Implementation Resolution

date: 20220622

Organized By: Zakat, Tax and Customs Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/E-Invoicing-Implementation-Resolution-Ar.pdf

Riyadh June 22, 2022:

Electronic Invoicing (e-Invoicing) has gone live in Saudi Arabia (KSA) since December 4, 2021 and its further implementation has been planned in two phases:

1. Phase 1Generation phase- which has gone live since December 4, 2022.
2. Phase 2 Integration phase- to go live on January 1, 2023.

With regards to the Integration phase, it is anticipated that six months before the second go-live date i.e by July 1, 2022, the Zakat, Tax and Customs Authority (ZATCA) will invite the first wave of taxpayers to integrate their IT systems with ZATCA’s Fatoora Portal.

The ZATCA released an updated draft of the e-Invoicing Implementation Resolution in Arabic on May 27, 2022. The changes made to the resolution, annexes and the related technical specifications are relevant for the latter phase that will go live on January 1, 2023.

Saudi increases Custom Duties for 99 products

date: 20220613

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/621693

Riyadh June 13, 2022:

Saudi Arabia increased customs tariffs on 99 commodities including vegetables, livestock and fish from June 12, 2022.

Mohammed Al-Jadaan, Minister of Finance and Chairman of the Zakat, Tax and Customs Authority (ZATCA), issued the decision of adjusting the customs tariffs based on the ceilings committed by the Kingdom in the World Trade Organization (WTO). The Saudi government is hoping to use custom increases to improve the balance of payments, increase exports and bring the private sector’s contribution to the gross domestic product (GDP) to 65%.

Among the changes are customs tariffs on sheep and goats rising from zero to 7%. Twelve types of fish and shrimp have also seen a rise with a minimum of 6% and a maximum of 15% respectively. A number of vegetables including onions, cucumbers, carrots, eggplant and zucchini now have import tariffs of 5%, up from zero.

The move came pursuant to the powers granted to the finance minister to protect and encourage national industries and local agricultural products.

Read more.

KSA: Taxpayers Exempt from Fines and Penalties for 6 months

date: 20220606

Organized By: GAZT

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/news_886.aspx

Riyadh June 1, 2022:

Zakat, Tax and Customs Authority (ZATCA) announced the launch of an initiative to waive fines and penalties for tax payers. The exemption will remain applicable for a 6-month period starting from 1 June 2022 till 30 November 2022.

The fines include delay in registration, late payment, report submissions and other general provisions related to VAT. However, the initiative doesn’t include fines related t tax evasion and fines that had to be paid before the launch of the initiative.

ZATCA has requested taxpayers to fully review the initiative through the simplified guideline available on its website. It includes a detailed explanation of the most important aspects of the decision, the types of penalties and the conditions that apply for benefiting from the exempt fines.

The Authority has urged all taxpayers to benefit from the initiative before it ends on November 2022. Any queries in this regards can be clarified by:

  • Dialing their call center number 19993
  • Or through their twitter account @Zatca Care
  • Or sending an e-mail to info@zatca.gov.sa.

Read more.

KSA: Purchases from Bahrain exceeding SR 3,000 must be disclosed

date: 20220530

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/621162/SAUDI-ARABIA/Passengers-purchases-from-Bahrain-exceeding-SR3000-must-be-disclosed

Dammam May 30, 2022:

The Zakat, Tax and Customs Authority (ZATCA) clarified whether fees will be applied to devices that are transported by travelers from Bahrain via the King Fahd Causeway.

The authority confirmed that travelers coming from Bahrain via the King Fahd Causeway bringing purchases worth more than SR 3,000 would be obliged to disclose it.

ZATCA noted that the fees applied to travelers will only be applied to new items wrapped in factory packaging that has not been used yet. It also indicated that travelers would be charged a value-added tax (VAT) of 15% on all imports they bring with them.

Read more.

Saudi Arabia contemplating to cut VAT Rate

date: 20220527

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/620938

Riyadh May 27, 2022:

Saudi Arabia is contemplating a cut down in the VAT rate which was increased to 15 percent in 2020 during COVID times. The VAT rate was tripled to shore up finances hit by low oil prices and diminishing global demand due to the raging pandemic.

Minister of Finance Mohammed Al-Jadaan said “We will ultimately consider cutting the VAT but at the moment we are still replenishing the reserves.”

Jadaan added “Saudi Arabia’s policy on fiscal sustainability would ensure that reserves do not fall below a certain percentage level of the country’s gross domestic product.”

The world’s biggest crude exporter, whose economy is estimated at $1 trillion, said in its budget for 2022 that the Fiscal Sustainability Program aims to de-couple the economy from oil price fluctuations, realizing several economic benefits for the non-oil economy and the private sector.

Read more.

KSA: ZATCA launches App to improve taxpayer experience

date: 20220426

Organized By: Gulf Business

External URL: https://gulfbusiness.com/saudis-zakat-tax-and-customs-authority-launches-app-to-improve-taxpayer-experience/

Riyadh April 26, 2022:

The Zakat, Tax and Customs Authority (ZATCA) has designed a new application to offer fast, reliable, and high-quality services to taxpayers. The App allows taxpayers from the business sector to complete their services in a much more effective manner. It also offers technical solutions to improve the taxpayer’s experience and contributes to enhancing the level of services provided by the Authority.

The ZATCA APP in total provides a host of 33 services, such as submitting zakat and tax returns, registering businesses and establishments, submitting objections, and viewing zakat and tax certificates. The application also allows taxpayers to inquire about the payment processes instead of visiting the Authority’s branches.

One of the most prominent advantages provided by the app is the online payment service that helps in completing the process of services in a more reliable and secure manner.

Read more.

ZATCA introduces Guide on Objections to ZATCA Decisions

date: 20220406

Organized By: Saudi Gazette

External URL: https://zatca.gov.sa/ar/HelpCenter/guidelines/Documents/Objection%20on%20ZATCA%20decisions.pdf

Riyadh- April 6, 2022:

The Zakat, Tax and Customs Authority (ZATCA) has released a detailed guide clarifying the process to file an objection against a tax assessment raised by ZATCA. This is for those cases where taxpayers disagree with their decision.

The guide is available only in Arabic at the moment and can be viewed here.

ZATCA Carries Out more than 1,300 Inspection Visits in the Kingdom

date: 20220318

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/news_482.aspx

Riyadh – March 18, 2022:

Tax inspectors at Zakat, Tax and Customs Authority’s (ZATCA) carried out more than 1,300 visits in markets and shops in the Kingdom as part of the national program to combat commercial concealment.

The inspections took place in Riyadh, Makkah, Medina, Qassim, and Jazan, and included various shops, such as auto parts markets, health, food and beverages, oil and gas. Riyadh region witnessed the highest number of inspections, with a total of 126 visits.

According to the Authority, the visits resulted in the detection of 88 cases of initial suspicion of commercial concealment. This comes with ZATCA’s keenness to unify efforts in coordination with its government sector partners to combat commercial concealment in all its forms, minimize commercial transaction violations and increase tax compliance.

Read more.

ZATCA announces Revised Penalties for Non-compliance with VAT and E-invoicing Rules

date: 20220209

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/HelpCenter/guidelines/Documents/Reclassifies_VAT_Penalties.pdf

Riyadh – February 9, 2022:

The Zakat, Tax and Customs Authority (ZATCA) published an announcement on its website regarding penalties for violations of VAT rules. However, it is only available in Arabic.

View the reclassification of VAT Penalties by ZATCA.

As part of the announcement, the previous fines have been amended ushering in a more cooperative and educational approach for penalizing taxpayers for their non-compliance with VAT rules than previously.

Read more.

ZATCA publishes Guide for developing a Fatoora compliant QR code

date: 20211213

Organized By: Zakat, Tax and Customs Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/Guided-to-developed-FATOORA-compliant-QR-code.pdf

Riyadh- December 13, 2021:

The Zakat, Tax and Customs Authority (ZATCA) published a guide that gives a technical explanation on how to develop a Fatoora compliant QR code for E-invoices. In accordance with the E-invoicing resolutions issued by ZATCA, all simplified invoices must contain a QR code containing certain prescribed information.

Electronic Invoicing is a procedure that aims to convert the issuance of paper invoices into an electronic process that allows the exchange and processing of invoices, credit and debit notes in a structured digital format between the buyer and seller. (View the E-invoicing guidelines)

View the guide on how to develop a Fatoora compliant QR code .

Read more: The first phase of mandatory electronic invoicing (FATOORAH) regulations have come into force in Saudi Arabia on December 4, 2021.

1st phase of mandatory E-invoicing comes into force in Saudi Arabia

date: 20211205

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/614322/SAUDI-ARABIA/E-invoicing-in-Saudi-Arabia-comes-into-force

Riyadh- December 5, 2021:

The first phase of mandatory electronic invoicing (FATOORAH) regulations have come into force in Saudi Arabia on December 4, 2021. FATOORAH project is expected to produce a major positive impact on the Saudi economy by bringing down hidden economic transactions and promoting fair competition.

Read more- ZATCA announces Penalties for E-Invoicing Violation

The first phase of E-invoicing means the complete cessation of using and issuing handwritten invoices. Now onwards, all tax payers are obliged to generate electronic invoices using compliant e-invoicing systems. Manual and hand-written invoices through text editors or number analysis applications will no longer be valid.

The authority lauded its efforts for spreading enhanced awareness amongst taxpayers and their readiness before the implementation date. This enabled private sector establishments to prepare well with the requirements for complying with E-invoicing.

The ZATCA has launched an E-Invoicing detailed guide explaining pertaining terms, categories subject to the E-invoicing regulations and types of transactions.

The second phase of e-invoicing will be implemented on January 1, 2023, to establish integration between E-Systems of taxpayers and the authority’s regulations

Read more.

KSA: The new deadline for filing October monthly VAT returns - Nov 30

date: 20211128

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_467.aspx

Riyadh – November 28, 2021:

The Zakat, Tax and Customs Authority has called on taxpayers from the business sector to submit their tax returns for last October month, no later than November 30, 2021. Late returns are subject to penalties between 5 percent and 25 percent of the unpaid tax amount.

Taxpayers can submit their tax returns quickly via the website (zatca.gov.sa).

Taxpayers wishing to obtain more information regarding value added tax can get in touch with the Authority’s office on :

  • Their unified number which works 24/7 (19993)
  • On Twitter (@Zatca_Care)
  • Via e-mail (info@zatca.gov.sa)
  • Instant conversations via the authority’s website (zatca.gov.sa)

Read more.

KSA: ZATCA announces Penalties for E-Invoicing Violation

date: 20211124

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_465.aspx

Riyadh – November 24, 2021:

The Zakat, Tax and Customs Authority (ZATCA) have released a list of penalties applicable to taxpayers for non-compliance with the e-Invoicing regulations in the Kingdom of Saudi Arabia (KSA) ( that will go into effect on 4 December, 2021).

For ease of reference the penalties are listed in the table below :

ViolationsPenalties (SAR)
Non-issuance of E-Inovices or failure to store E-Invoices 5,000 – 50,000
Failure to include the QR Code in the simplified tax invoices/Failure to inform ZATCA of any malfunction that hinder the issuance of E-Invoices Initially, a warning will be sent to the taxpayer. The maximum penalty reach up to 50,000 SAR.
Erasing or amending the E-Invoices after issuance 10,000 – 50,000

Read more.

ZATCA: Taxpayers to expedite Preparation for E-billing Requirements into effect on Dec 4, 2021

date: 20211107

Organized By: Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_459.aspx

Riyadh – November 7, 2021:

The Zakat, Tax and Customs Authority (ZATCA) has called on taxpayers subject to the electronic billing regulation, to expedite the necessary preparation in line with the first phase of E-Invoicing requirements, with only days remaining to come into force on December 4, 2021.

The authority stressed that establishments are to completely stop using handwritten invoices or invoices written on computers through text editors or number analysis programs, and ensure there is a technical solution for E-invoicing compatible with its requirements. The requirements also include the issuance and preservation of electronic invoices with all elements, including the QR code for simplified tax invoices, and the tax number of the buyer registered in the VAT for tax invoices, in addition to including the invoice address, according to the issued type.

The authority said that taxpayers subject to electronic invoicing can view the non-binding indicative list for providers of technical solutions for electronic invoicing, in order to choose the appropriate technical solution as per size of the facility and the type of sector.

**It’s not clear from the list that the provision of electronic billing solutions is limited to them, but the taxpayer is considered legal when he meets the requirements using any technical solution.

Read more.

Saudi: No plan to cut VAT rate this year

date: 20211104

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/613035/SAUDI-ARABIA/Saudi-Arabia-has-no-plan-to-cut-VAT-rate-any-time-soon-says-Al-Jadaan

Riyadh – November 4, 2021:

Saudi Finance Minister Mohammed Al-Jadaan revealed the Kingdom has no plans to reduce the rate of value-added tax (VAT) in the near future. The decision on VAT will be reviewed after several years as and when when the public finances improve.

Saudi Arabia raised VAT from 5 percent to 15 percent in May 2020 as part of austerity measures to deal with the economic repercussions of the pandemic-hit economy.

Al-Jadaan said the goal of the increased rate of VAT was to deal with the economic repercussions of the coronavirus pandemic. “When the public finances improve after several years, most likely within five years, it will be reexamined, but there will be no VAT cut anytime soon,” he said.

View More.

ZATCA warns Taxpayers against Tax Manipulation Trap by some Twitter accounts

date: 20211024

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/612478

Riyadh – October 24, 2021:

The Zakat, Tax and Customs Authority has asked taxpayers to stay on guard against few Twitter accounts, that claim to help them evade payment of tax. This is either through making zero tax or reducing the amount of tax in an illegal way, which is in violation of the authority’s tax regulations.

The authority has requested taxpayers not to disclose their access data to their electronic portal including the secret code to such false account holders and refrain from dealing with them in any manner.

The authority is willing to raise awareness of taxpayers rights, in line with zakat and tax laws in the Kingdom and at the same time it will continue to take legal action against these misrepresenting accounts.

Read more.

ZATCA invites Taxpayers subject to the Withholding Tax to submit Tax Return

date: 20211007

Organized By: ​Zakat, Tax and Customs Authority

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/News_447.aspx

Riyadh- October 7, 2021:

​Zakat, Tax and Customs Authority (ZATCA) invites taxpayers from the business sector subject to the withholding tax in KSA to submit their tax return for last September before October 10, 2021.

Taxpayers need to quickly submit their tax returns through the website to avoid the filing fee for late submissions, which is 1% of the unsettled tax every 30 days since the due date.

Should you need more information about the withholding tax, kindly contact the Authority through the below contact details:

  • Unified number (19993) operating 24 hours a week
  • Twitter account (@zatca_Care)
  • E-mail (info@zatca.gov.sa)
  • Instant chats via the website

Read more.

ZATCA: 90 Days Left for the Enforcement of E-Invoicing Phase I

date: 20210913

Organized By: Saudi Gazette

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/News_433.aspx

Riyadh- September 13, 2021:

Taxpayers who are subject to the E-invoicing regulations are urged to start the necessary preparations within their organizations to comply with the requirements of Phase One of E-invoicing ‘FATOORA’ that will be enforced in 90 days.

The authority clarified the requirements of Phase One:

  • Stopping the generation of handwritten or typed invoices through text editing software or figure analysis software
  • Ensuring the availability of an e-invoicing system or solution that is complaint with the requirements published by the authority.

The requirements to comply also include generating and storing e-invoices with all its elements, including the QR code for simplified tax invoice, the buyer’s tax registration number registered in VAT for the tax invoices, and invoice title in accordance to the generated tax invoice.

Read more.

KSA: Government to bear VAT on private education services for citizens

date: 20210906

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/610561/SAUDI-ARABIA/State-to-bear-VAT-on-private-educational-services-to-citizens

Riyadh- September 6, 2021:

The Zakat, Tax and Customs Authority has clarified that the government will bear value-added tax (VAT) on private educational services provided to citizens.

The services include tuition fees and other school expenses including the textbooks sold by private and international schools subject to tax and approved by the Ministry of Education.

The authority explained that this was in line with the Royal order to pay for VAT on behalf of citizens benefiting from the private educational services in the state.

Click here to read more.

KSA gears its switch over to E-Invoicing as per ZATCA

date: 20210902

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/610228/SAUDI-ARABIA/FATOORAH-launched-as-Saudi-Arabia-set-to-switch-over-to-e-invoicing

KSA – September 2, 2021:

The Zakat, Tax and Customs Authority (“ZATCA”) launched the electronic invoicing project (FATOORAH) on August 24, 2021 to bring transparency into the economic transactions and promote fair competition. During the official inaugural ceremony, ZATCA highlighted the importance of the new E-invoicing system for its economy and provided an overview its implementation mechanism.

E-invoicing in KSA is given the deadline of December 4, 2021 for the Generation Phase (Phase I).

  • Phase 1 (Generation phase)- Specific criteria are to be adhered to for all invoices, credit notes and debit notes issued by taxpayers in KSA as of 4 December 2021.
  • Phase two (Integration Phase)- Additional requirements are to be fulfilled by 1 January 2023, where invoices need to be exchanged with and pre-approved by the tax authority. This warrants changing software currently being used and choosing one that is compliant with ZATCA’s directions.

ZATCA has published a Simplified Guide and Detailed E-Invoicing guide that comprises detailed information the applicability of E-Invoicing to various industries, types of invoices, taxable persons and transactions subject to invoicing and technical guidelines pertaining to E-Invoicing Solution Requirement.

ZATCA has also recently released a list of E-invoicing solutions providers who meet the qualification requirements.

The FATOORAH aims to narrow down disguised and illegal establishments. It will activate the consumer’s role in monitoring and reporting, bringing transparency over the movement of funds, control over crimes and other violations. When implemented accurately, it can alleviate the administrative burden both for businesses and the tax authority.

Read more…

Contact our Tax Experts for any clarifications.

KSA: Fatoora E-Invoicing Project launched by Governor of Zakat, Tax and Customs Authority

date: 20210826

Organized By: Saudi Gazette

External URL: https://zatca.gov.sa/en/MediaCenter/News/Pages/News_428.aspx

KSA – August 26, 2021:

The Zakat, Tax and Customs Authority (ZATCA) launched ‘Fatoora- The e-invoicing project’ which is a mandate in KSA from December 4, 2021.

  • The first phase mandates the issuance and filing of tax invoices and the relevant debit/ credit notices electronically
  • The second phase will be implemented in a phased manner from January 1, 2023, which will establish the integration of electronic systems for taxpayers and ZATCA requirements.

Speaking at the launch ceremony in the Four Seasons Hotel in Riyadh, ZATCA Governor Eng. Suhail bin Mohammed Abanmi emphasized that the Fatoora project is one of the most ambitious national projects led by the Authority and is a part of their effort to achieve the digital transformation goals outlined in the Kingdom’s Vision 2030. Eng. Abanmi stated that the ‘Fatoora’ project is aligned with the latest developments in the world’s leading economies and will have a tangible impact on the national economy.

He iterated that the project would promote fair competition and significantly contribute toward efforts by several government agencies to combat trade concealment.

View the Simplified Guidelines for E-Invoicing (Phase 1) and E-Invoicing Detailed Guidelines published by ZATCA.

The guidelines contain E-Invoicing (FATOORAH) requirements and the detailed technical requirements for taxpayers and E-Invoicing providers. It also includes detailed technical requirements such as invoice specifications and security specifications for the E-Invoicing application.

Click here to read more.

Contact our Tax Experts for any clarifications.

KSA: Deadline extended to 16 February 2022 for business licensing fraud offenders to legalize their status

date: 20210824

Organized By: Gulf News

External URL: https://gulfnews.com/world/gulf/saudi/saudi-arabia-extends-amnesty-for-business-licensing-fraud-offenders-1.81745895

KSA – August 24, 2021:

Saudi Arabia has extended the grace period for business licensing fraud offenders to legalize their status to 16 February, 2022.

The period provides multiple options for violators by exempting those who apply to the Ministry of Trade to request rectification of their legal status from penalties and from paying income tax retroactively.

Dr. Majid Al Qasabi, Minister of Commerce, said the extension reflects the Kingdom’s keenness to provide the opportunity to more businesses to correct their legal status. A number of large and medium-sized firms, whose annual revenues exceeded more than 6 billion riyals, have benefited from the amnesty so far.

Anyone arrested by the ministry for committing a crime or violating the anti-business licensing fraud law before submitting a request to rectify their situation, or whoever was referred to the Public Prosecution, or the competent court, is not exempt.

Violators of the anti-concealment system can rectify their legal status by submitting an application through the Ministry of Commerce website

Applicants will have several options, including:

  • Introducing a new legal partner (Saudi or non-Saudi);
  • Selling, assigning or dissolving the business;
  • Transferring the ownership of the business to a non-Saudi after the latter obtains an investment license;
  • A non-Saudi can apply for a distinct residence visa, or an investment license to continue business;
  • Apply for final exit.

Saudi Arabia has tightened penalties for business licensing fraud, also known as Tasattur or cover-ups, in which foreign nationals owning businesses in the kingdom use the names of Saudi citizens. A new anti-business licensing fraud regime passed by the Saudi Cabinet seeks to eliminate the shadow economy and includes tough penalties for offenders of up to five years in prison and a fine of up to SR 5 million.

Continue to read more.

Saudi Arabia: ZATCA releases VAT Guideline for Government Bodies in KSA

date: 20210819

Organized By: Saudi Gazette

External URL: https://zatca.gov.sa/en/HelpCenter/guidelines/Documents/VAT%20Guideline%20-%20Government%20Bodies.pdf

UAE – August 19, 2021:

The Saudi Zakat, Tax, and Customs Authority (ZATCA) has issued a VAT Guideline for Government Bodies in the Kingdom of Saudi Arabia . To view the guide click here.

The guide is directed towards Saudi Government bodies, with the objective to provide clarifications with respect to the interpretation of Economic Activity for VAT purposes in addition to the VAT treatment of transactions between persons and such bodies. The guideline provides information on the VAT treatment of activities undertaken by these bodies especially those activities that are subject to VAT and those that are outside the scope of VAT.

For further advice on specific transactions visit the official website at zatca.gov.sa which contains a wide range of tools and information to support persons subjected to VAT, as well as visual guidance materials and other relevant information.

Saudi Arabia records highest number of real estate transactions

date: 20210809

Organized By: GAZT

External URL: https://zatca.gov.sa/ar/MediaCenter/News/Pages/News_816.aspx

Riyadh – August 9, 2021:

The Saudi Zakat, Tax and Customs Authority registered over 543,000 Real Estate Tax Transactions since its implementation in October 2020. The highest number of tax transactions were reported in Riyadh (125,110), followed by Jeddah (55,680), Buraidah (50,462), Makkah (18,955) and Madinah Al Munawwarah (18,557).

In accordance with the provisions of the Regulating Authority on real estate, the tax is imposed at a rate of 5% of the total real estate value. The tax is to be paid by the seller or disposer of the property and not the buyer.

The market has successfully adapted to this new tax, and this is certainly a positive sign for the real estate market in Saudi Arabia.

Read More.

View the Introductory Guide to E-invoicing issued by GAZT

date: 20210803

Organized By: GAZT

External URL: https://gazt.gov.sa/en/RulesRegulations/Taxes/Documents/E-invoicing%20guideline.pdf

Riyadh- August 3, 2021:

The General Authority of Zakat and Tax has issued an Interactive Guide with Links for taxpayers subject to the E-invoicing regulation. It provides an overview on E-Invoicing, the implementation journey, compliance requirements and process rules covering the implementation phase.

The enforcement of E-invoicing will be mandated from December 4, 2021 and the integration will be done over a period beginning from January 1, 2023. Taxable persons are required to begin generating and storing electronic invoices.

NOTE: Date of enforcement of generation and storing of e-invoices -December 4th, 2021

Fines and penalties – All provisions related to tax invoices in the VAT Law are applicable to electronic invoices including fines and penalties.

ZATCA invites Taxpayers from the Business Sector to submit Value-added Tax Returns

date: 20210719

Organized By: Saudi Gazette

External URL: https://gazt.gov.sa/ar/MediaCenter/News/Pages/news_804.aspx

UAE- July 19, 2021:

The Zakat, Tax and Customs Authority (ZATCA) has called on taxpayers from the business sector to submit their VAT returns for the month of last June and the second quarter of 2021 AD no later than July 31, 2021.

The Authority urged business sector taxpayers to submit their tax returns online on their website (gazt.gov.sa) in order to avoid the penalties for not submitting the declaration within the prescribed period, at a minimum of 5% and a maximum of 25% of the tax value.

Taxpayers from the business sector wishing to seek more information can contact the Authority in the following ways:

  • The unified number for the call center (19993) 24/7
  • On Twitter (@Zatca_Care)
  • Send an e-mail (info@zatca.gov.sa)

Click here to view more.

Saudi Arabia releases Circular on VAT refund to eligible real estate developers

date: 20210717

Organized By: Saudi Gazette

External URL: https://bit.ly/3xIYjM5

UAE- July 17, 2021:

The Zakat, Tax and Customs Authority (ZATCA) has released a Circular No. 2106002 that details the process of registration for real estate developers for the VAT refund incurred in relation to exempt real estate activities.

Click here to view the circular issued in Arabic at the moment.

ZATCA outlines 3 steps for taxpayers in first phase of E-invoicing

date: 20210711

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/608583/SAUDI-ARABIA/Three-steps-outlined-for-taxpayers-to-take-in-first-phase-of-E-invoicing

Riyadh- July 11, 2021:

The Zakat, Tax and Customs Authority (ZATCA) has highlighted three main steps for taxpayers who are subject to the E-invoicing (FATOORAH) regulation. It outlines the compliance requirements and process rules covering the generation and integration phase. The first phase will be mandated from December 4, 2021 and the integration will be done over a period beginning from January 1, 2023.

The three steps in the first phase are:

  • Stop issuing handwritten invoices, or invoices issued manually through text editing softwares
  • Use a compliant E-invoicing system to generate and store the invoices electronically, which can be a cash register machine, a cloud system, or an enterprise resource planning software (ERP).
  • Additionally, the E-invoices must include all the requirements of a tax invoice. The simplified tax invoices must include a QR code, and the tax invoices must include the VAT number of the buyer (a registered VAT taxpayer).
  • The Authority aims to gradually introduce the implementation of E-invoicing through well-laid out steps and requirements, and would continue to inform and educate taxpayers who are subject to the E-invoicing regulation.

Read More.

Saudi Arabia released VAT guideline for Insurance & Reinsurance Activities

date: 20210702

Organized By: GAZT

External URL: https://gazt.gov.sa/en/HelpCenter/guidelines/Documents/VAT%20Circular_Insurance%20%20Re-insurance_EN.pdf

Riyadh- July 2, 2021:

Zakat, Tax and Customs Authority (ZATCA) issued a guide to throw clarifications on the insurance and reinsurance activities made by businesses and the associated VAT implications. The guide outlines the services that will be recognized under insurance/ reinsurance activities and along with the applicable VAT treatments.

The guide further publishes the implications of insurance claims, reinsurer’s share of claim, principles relating to VAT deductions and partial VAT deductions.

View the VAT guidelines in Arabic or English.

Kindly seek expert advice if you have any doubts on this subject.

Saudi Arabia released Circular on the Reverse Charge Mechanism (RCM) Application

date: 20210701

Organized By: GAZT

External URL: https://gazt.gov.sa/en/MediaCenter/Publications/Documents/VAT%20Circular%20-%20RCM-EN.pdf


Riyadh- July 1, 2021:

Zakat, Tax and Customs Authority (ZATCA) issued Circular No. 2106001 explaining the application of Reverse Charge Mechanism (RCM) in accordance with the unified VAT Agreement of the GCC States and KSA VAT Law. The circular throws clarification on the application of RCM rules to businesses that receive a supply of goods or services from non-resident suppliers.

Reverse Charge Mechanism is defined as the mechanism by which the Taxable Customer is obligated to pay the Tax due on behalf of the Supplier, and is liable for all the obligations provided for in the Agreement and the Local Law. Reverse Charge Supplies refer to Supplies on which the Customer is obliged to pay the VAT due under the Reverse Charge Mechanism

RCM is only due on services which are taxable in nature and received by:

  • A VAT Registered Taxpayer from a non GCC resident supplier;
  • A taxable customer from suppliers resident in another GCC state (until E-Service System for Intra-GCC supplies is implemented).

This circular is a must read for all taxable persons receiving supplies from non-resident suppliers to ensure that the tax treatment being followed is in accordance with the applicable VAT legislations. View the Circular in English or Arabic.

Kindly seek expert advice if you have any doubts on this subject.

'Zakat, Tax and Customs' Invites Taxpayers to go through the Simplified Guide to Facilitate E-Invoicing (FATOORAH)

date: 20210629

Organized By: GAZT

External URL: https://gazt.gov.sa/en/MediaCenter/News/Pages/News_794.aspx

Riyadh- June 29, 2021:

The Zakat, Tax and Customs Authority requests all taxpayers to go through the simplified guide on the E-Invoicing (FATOORAH) page.

The guide includes the following:

  • Requirements for compliance with E-Invoicing (FATOORAH) and the phases of the implementation enforceable as of December 4, 2021.
  • Details on the two types of invoices, Standard tax invoice, which is used usually between two VAT registered business, and the Simplified tax invoice, which is used usually between business and customer.
  • Explanation on the way E-Invoicing works, and the prohibited functions that taxpayers should avoid when the regulation is enforced.

All taxpayers, solution providers and those interested can send inquiries related to E-Invoicing via:

  • The unified number (19993) that works 24/7.
  • Twitter account (@Gazt_care).
  • E-mail (info@gazt.gov.sa).
  • Instant chats via the website (gazt.gov.sa).​

Click here to read more.

Saudi Arabia to reconsider VAT upon GDP growth

date: 20210504

Organized By: Khaleej Times

External URL: https://www.khaleejtimes.com/region/mena/saudi-arabia-to-reconsider-vat-after-achieving-economic-objectives

Riyadh- May 4, 2021:

The Kingdom of Saudi Arabia will reconsider value-added tax (VAT) after it has achieved certain objectives related to its economy and economic growth, a senior official has said.

The decision to increase VAT from 5 % to 15 % from July 1, 2020 was taken by the Saudi government in response to the economic impact of Covid-19 and the decline in revenues from lower oil prices. The Minister of Finance Mohammed Al-Jadaan has said that tripling value-added tax (VAT) to 15% was the best among the tough choices the government took during 2020.

He affirmed that taxes are an essential part of non-oil-dependent countries, indicating that the government’s goal is to expand the economy to reduce the economic burden, off the shoulders of their nationals or the private sector.

“Saudi Arabia will reconsider the value-added tax upon achieving certain objectives, such as the Kingdom’s gross domestic product (GDP) growth, economic broadening, and a steady rise in oil price,” Al Jadaan said.

Click here to read more.

Saudi Arabia has no plans to introduce income tax: Crown Prince Mohammed Bin Salman

date: 20210429

Organized By: Gulf News

External URL: https://gulfnews.com/world/gulf/saudi/saudi-arabia-has-no-plans-to-introduce-income-tax-crown-prince-mohammed-bin-salman-1.1619558916351

Riyadh- April 29, 2021:

Saudi Arabia has no plans to introduce income tax and the 15 percent VAT rate is a temporary decision for 5 years, Crown Prince Mohammed Bin Salman said in a TV interview. He also spoke on plans to eventually reduce the VAT rate, iterating that the move to increase the rate to 15 percent was a painful decision that he had to undertake.

In a wide-ranging TV interview to mark the fifth anniversary of the Saudi Vision 2030 strategy, the Crown Prince spoke about the Kingdom’s economic plans, developments and achievements made since the launch of Vision 2030, which aims to diversify the Kingdom’s economy without reliance on oil.

The Crown Prince explained figures related to housing policies, legislation and the private sector’s contribution to the Kingdom’s economy, reviewing many economic figures, most notably the growth reflected in the Saudi stock market index.

Speaking of the future, Mohammed bin Salman said “We would launch vision 2040 after achievement of goals of vision 2030. He also revealed that the Kingdom is in discussions to sell 1 percent of state oil firm Saudi Aramco to a leading global energy company. Aramco previously sold a sliver of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world’s biggest initial public offering.

Click here to read more.

KSA issues 40,500 fines for tax violations in first quarter

date: 20210325

Organized By: Arab News

External URL: https://www.arabnews.com/node/1830706/business-economy

Riyadh- March 25, 2021:

Saudi officials have issued 40,500 fines related to a number of different kinds of tax violations this year.

Governments worldwide are cracking down on tax evasion after sources public finances took a hammering during the pandemic. Few Gulf countries, including Saudi Arabia, introduced value added tax to boost revenues and reduce the dependency on oil revenues.

About 1.3 million registered taxpayers exist in the Kingdom according to the authority’s website.

Click here to read more.

No Customs Duty on personal items worth SR3,000

date: 20210321

Organized By: Saudi Gazette

External URL: https://www.saudigazette.com.sa/article/604509/SAUDI-ARABIA/No-customs-duty-for-personal-belongings-worth-SR3000

Riyadh- March 21, 2021:

Saudi Customs has clarified that travelers arriving in Saudi Arabia will not have to pay customs duty on new personal belongings if they are worth less than SR3,000 ($800). The report mentions that threshold for personal shipments is SR1,000 which includes the value of the goods and freight charges. However as per Saudi customs, a 15% value-added tax (VAT) is imposed on imported goods.

Students returning from abroad will be exempted from taxes on household furniture and personal belongings at the end of their studies or at the end of work abroad after submitting a proof of college attendance, it said.

Cars manufactured in 2016 and afterwards are allowed to be imported from UAE to Saudi Arabia, if they follow local specifications and standards and the fuel economy standard. Tax will be applied at 5% of the vehicle’s value, in addition to 15% VAT. The 15% VAT rate also applies to goods imported from other Gulf states, in addition to shipping fees, customs fees and any other charges. These will be applied until the electronic services system among the Gulf countries begins, Saudi Customs said.

Click here for more

GAZT launches an interactive guide to educate electronic stores on VAT requirements

date: 20210307

Organized By: GAZT

External URL: https://gazt.gov.sa/ar/MediaCenter/News/Pages/News_555.aspx

Dubai- March 7, 2021:

GAZT launches a VAT guide for stores to enable owners of electronic stores to comply with their obligations relating to VAT and guide them how to register, provide acknowledgment and pay tax. The guide includes a definition of electronic stores for those operating through independent websites, social media platforms, smart phone applications or instant chat applications.

The guide clarifies the obligations of the online store owner whose annual sales exceeds 375 thousand riyals annually before the Zakat and Income Authority, which include registering for value-added tax, displaying the tax certificate in the online store, filing tax returns and paying tax liabilities.

The Authority emphasized the necessity for the online store to clearly display the VAT registration certificate in front of consumers, regardless of the electronic sales platform through which the merchant operates in order to avoid imposing fines on the store.

View the VAT guide for e-shops.

Click here to read more.

KSA: Fines on late VAT returns have been waived until June 2021

date: 20210202

Organized By: Saudi Gazette

External URL: https://saudigazette.com.sa/article/602768

Saudi Arabia- February 2, 2021:

The Saudi General Authority of Zakat and Tax (GAZT) extended the waiver period of fines and financial penalties for non-payment of Value Added Tax (VAT) until June 30, 2021. The move is part of the Kingdom’s initiatives to help the private sector face the economic fallout resulting from the coronavirus outbreak.

Taxpayers will be exempted from fines on delays in the payment of taxes or filing tax returns. They will be also exempted from the penalties imposed for correcting tax returns under the VAT law.

Taxpayers will be 100% exempted from penalties, if they fully pay the principal tax due under the relevant tax returns during the period from January-March 2021. GAZT added that 75% of fines will be waived if taxpayers fully pay the principal tax due under the relevant tax returns during the period from April-May 2021. A 50% waiver will also apply to taxpayers that fully pay the principal tax due under the relevant tax returns during June.

However, The GAZT clarified that the measure does not include any waivers of penalties that were imposed by the authority, other than delays in tax payments, submission of tax returns and correction of tax returns. The initiative does not also cover the fines imposed for tax evasions and the fines paid before January 21.

Saudi authorities clarify which cars are exempt from VAT

date: 20201230

Organized By: Gulf News

External URL: https://gulfnews.com/world/gulf/saudi-authorities-clarify-which-cars-are-exempt-from-vat-1.76132760

Saudi Arabia- December 30, 2020:

While some car owners put a value-added tax of 15% on the cars they sell off outside the taxable showrooms, the Saudi Zakat and Income Authority confirmed, in response to an inquiry, that selling a used car from an unregistered individual, who does not run a business to another individual is not subject to VAT, local media reported.

According to the Zakat and Income Authority, taxable cars include vehicles sold off in auctions if the seller is carrying out an economic activity and cars sold off by showrooms or VAT registered businesses.

Saudi Arabia to review VAT increase after the pandemic ends

date: 20201122

Organized By: Khaleej Times

External URL: https://www.khaleejtimes.com/coronavirus-pandemic/coronavirus-saudi-arabia-to-review-vat-increase-after-covid-19-crisis-ends

Riyadh- November 22, 2020:

Saudi Arabia will review its VAT increase after the coronavirus pandemic ends, the Kingdom’s acting media minister said.

Saudi Arabia tripled value-added tax to 15% in July to offset the impact of lower oil revenue on state finances.The decision was a painful one and has undoubtedly caused concern for every individual and family.

“This decision is like any other decision, it can be revised God willing when this crisis is over,” Majid bin Abdullah al-Qasabi told reporters at a news conference, referring to the global pandemic.

Click here to read more.

Saudi Arabia: Real Estate Transaction Tax - A new tax introduced

date: 20201002

Organized By: Gulf News

External URL: https://gulfnews.com/world/gulf/saudi/saudi-arabia-exempts-property-deals-from-15-vat-new-tax-set-at-5-1.1601599182457

Riyadh- October 2, 2020: Saudi Arabia will exempt real estate transactions from a 15 per cent VAT (value-added tax) and instead impose a new 5 per cent tax on property deals. The Saudi finance minister affirmed that the order aimed to support Saudi citizens who want to buy homes.

The country is facing a deep recession, with the economy shrinking by 7 per cent in the second quarter and unemployment hitting a record high of 15.4 per cent. The government had in July tripled VAT to 15 per cent to boost non-oil revenues, but the move set off limited domestic demand.

The official announcement can be accessed through the following link:

https://www.uqn.gov.sa

IMF says VAT should be doubled to 10% in Saudi Arabia

date: 20190909

Organized By: Khaleej Times

External URL: https://www.khaleejtimes.com/business/global/imf-says-vat-should-be-doubled-to-10-in-saudi-arabia

The International Monetary Fund (IMF) has suggested that the value-added tax (VAT) should be doubled from five percent to 10 percent in Saudi Arabia in consultation with the other Gulf countries.

Analysts expect the hike in VAT rate will come only after 2021 once Kuwait and Oman will also be ready to implement it and as a customs union, the increase makes sense across the GCC countries.

“The introduction of the VAT in January 2018 was a landmark achievement, with revenue collections exceeding expectations. The reduction in the registration threshold at the beginning of 2019 has also gone smoothly. Staff suggested that consideration be given to raising the VAT rate from 5 to 10 percent, in consultation with the GCC,” IMF said in a report prepared its staff after consultation with the authorities in the Kingdom.

The UAE and Saudi Arabia introduced the five percent value-added tax from January 2018 with both the countries surpassing their tax collection targets.

Thaddeus Best, an analyst at Moody’s Sovereign Risk Group, said as a customs union, it is logical that GCC countries would seek to keep their VAT rates harmonised in order to prevent tax arbitrage opportunities emerging within the GCC.

“However, as the hesitant implementation of five percent VAT across the GCC since 2018 shows, there is some scope for VAT differentials to be tolerated, so long as they are relatively small and temporary, as it is currently the case in the GCC with only three out the six countries having implemented the measure so far. Nevertheless, we think it is unlikely that Saudi Arabia, the UAE and Bahrain would raise VAT rates further until the remaining GCC sovereigns have finalised their VAT frameworks,” Best told Khaleej Times.

IMF suggests hiking VAT; commends Saudi reforms

date: 20190516

Organized By: waheedabbas

External URL: https://www.khaleejtimes.com/imf-suggests-hiking-vat-commends-saudi-reforms

The International Monetary Fund has recommended that the 5 per cent value-added tax (VAT) levied in Saudi Arabia and the UAE as part of a GCC-wide framework should be raised, saying it is low by global standards.

The IMF suggested in a country note on the kingdom released late on Wednesday that the decision should be taken following consultations with GCC countries.

“The introduction of VAT has been very successful, and consideration should be given to raising the rate from 5 per cent, which is low by global standards, in consultation with other GCC countries,” it said in the note.

The UAE and Saudi Arabia levied 5 per cent VAT on a host of goods and services from January 1, 2018, in order to bolster the revenues of the Gulf governments as part of diversification initiatives. Other Gulf countries will levy VAT at a later stage. Currently, it is one of the lowest in the world.

MCA is now a FTA approved Tax Agent

date: 20190327

MCA Management Consultants has qualified to represent clients to FTA in matters relating to VAT after earning the approval as a FTA accredited Tax Agent.

MCA has met the stringent conditions specified by the Federal Tax Authorities to attain this approval. The conditions safeguard the interest of registered VAT entities and ensure that VAT computation, filing and audit is as per the guidelines contained in the various statutes of the VAT law in UAE.

Revealed: Impact of VAT in Saudi Arabia, UAE, one year on

date: 20190207

Organized By: Arabian Business - Sam Bridge

External URL: https://www.arabianbusiness.com/politics-economics/412762-revealed-impact-of-vat-in-saudi-arabia-uae-one-year-on

2019 economic outlook: Weaker oil would put pressure on expenditure in countries with higher break-even prices

Early data suggests that the inflationary impact of the value-added tax (VAT) in both Saudi Arabia and the UAE has largely been contained, according to the most recent PwC Middle East Economy Watch.

Richard Boxshall, senior economist at PwC Middle East, writing in the report, said the impact of VAT in Saudi Arabia was “limited”, mainly because it raised more revenue than was initially expected.

“Overall, the new tax policy has been relatively successful in diversifying government revenue without producing excessive inflation,” he said. “A fuller picture will emerge over the next six months or so, including from studying Bahrain, which joined the VAT club this year.”

Saudi Arabia’s preliminary fiscal outturn data, released alongside the budget in December, estimates that VAT raised $12.2bn in 2018 – nearly a third more than it had expected.

In a January 2018 projection made by the General Authority of Zakat & Tax, the amount raised is equivalent to about 1.6% of GDP.

“This suggests a relatively high efficiency of collection in relation to private consumption by international standards,” said Boxshall.

“The VAT brought in more funds than the expat levy and excise taxes combined, and triple the amount from taxes on income and capital gains.”

While no data is available on the UAE as yet, Boxshall said it is likely to be higher in relative terms than in Saudi Arabia “because private consumption makes up a larger share of the economy”. Seventy percent of the revenues will be distributed to each of the seven emirates, potentially providing a substantial boost for some.

Best year for exporters
Boxshall said 2018 was the best in five years for Middle Eastern oil exporters, driven by two main factors – rising oil prices and increased government spending.

“This combination of stronger prices, as well as fiscal and structural reforms put these economies on a solid footing for 2019, despite a weaker final quarter marked by increased geopolitical risks and oil prices falling into correction by year’s end,” he said.

Oil market developments are likely to be the dominant economic driver for the region once again in 2019, following the sharp decline in prices in the final months of 2018, and OPEC and its allies agreeing to cut output by 1.2m barrels a day in November.

Boxshall said weaker oil would put pressure on expenditure in countries with higher break-even prices.

“This includes Saudi Arabia, whose 2019 budget envisages a 20% increase in capex and a 7% overall increase compared with the 2018 outturn,” he said. “However, Saudi Arabia’s low debt level (about 19% of GDP) means it can finance a larger deficit if needed, although it is still aiming to balance its budget by 2023.”

Active year for M&As and IPOs
Whatever happens at a macroeconomic level, 2019 is likely to be an active year for corporate transactions, which includes major M&A and IPO activity.

Banking sector mergers are under discussion in several countries. The region is widely recognised as being overbanked and has begun to consolidate over the past few years. As banks scale up through mergers, this should boost the sector’s capacity to finance projects and businesses, supporting growth.

Meanwhile, efforts to attract investment will continue, including the announcement of which sectors are eligible for 100% onshore foreign ownership under a new UAE law. There should also be progress in privatisation efforts in Saudi Arabia, Oman and Kuwait.

Taxpayers in UAE and Saudi Arabia: Get ready for official tax audits in 2019

date: 20181225

Organized By: The National Business - Dania Saadi

External URL: https://www.thenational.ae/business/economy/taxpayers-in-uae-and-saudi-arabia-get-ready-for-official-tax-audits-in-2019-1.806213

Taxpayers in the UAE and Saudi Arabia will have to brace themselves for official audits next year as the roll-out of the 5 per cent VAT since January 1 this year overcomes a number of hurdles and teething problems.

Now that regulations are in place, taxpayers are expected to prepare for audits by the UAE’s Federal Tax Authority and Saudi Arabia’s General Authority of Zakat and Tax next year. It is an exercise that will test their resources and the accuracy of record keeping as well as the filing of tax returns.

The two states were the first countries in the Arabian Gulf to introduce the levy following the implementation of excise taxes on energy and fizzy drinks and cigarettes in 2017.

“In the UAE and Saudi Arabia, next year there will be a lot of full-scale tax audit activity undertaken on businesses,” said David Stevens, GCC VAT

Implementation Partner at advisory EY.

“These businesses need to prepare themselves to be able to completely justify all of their numbers, all of their data, all of their statements, all of their payments, all of their invoices, all of their record-keeping, and all various other aspects of their VAT compliance that will come under increased scrutiny by the authorities as we go into the second year of operation.”

GCC countries are introducing taxes to cope with the crash in Brent oil prices from more than $115 per barrel in mid-2014 to around $50 per barrel currently.

The International Monetary Fund estimated that the introduction of VAT in the region could generate new revenue of 1.5 to 3 per cent of non-oil GDP.

Bahrain will be the third country to introduce the levy on January 1, 2019, but it plans to introduce a more complex system that has a lot of items exempt from VAT amid a lack of clarity over many aspects of the regulations.

Meanwhile, in the UAE and Saudi Arabia, the tax authorities – which toiled in 2018 to clarify ambiguities about VAT rules and regulations – will need to continue this exercise into 2019 as they begin to conduct tax audits.

“The authorities will be launching audit activity while there are some areas with unclarified rules, so they won’t know how to enforce them,” said Mr Stevens.

“The pressure falls on the authorities to resolve any unsettled, non-clarified or disputed areas of interpretation. They need those clarified so that auditors can do their job and taxpayers need that to make sure they are fully compliant.”

Companies in 2018 struggled to be compliant for various reasons. Some waited too long, some did not expect the levies to be introduced, while others changed their processes to comply, but their work was dogged by mistakes.

Saudi Arabia collects twice as much VAT as expected in 2018- budget document

date: 20181218

Organized By: BONDS NEWS - Reporting by Stephen Kalin and Marwa Rashad; Editing by Gareth Jones

External URL: https://www.reuters.com/article/saudi-budget-tax/saudi-arabia-collects-twice-as-much-vat-as-expected-in-2018-budget-document-idUSB2N1YE016

Saudi Arabia collected 45.6 billion riyals ($12.16 billion) from value-added tax (VAT) in 2018, more than double its initial estimate, budget documents showed.

The Saudi budget expects total tax revenues of 166 billion riyals this year, up from an initial estimate of 142 billion riyals, the document showed.

The Saudi government has said it expects VAT, which was introduced earlier this year, to be one of the main generators of non-oil revenue. ($1 = 3.7507 riyals) (Reporting by Stephen Kalin and Marwa Rashad; Editing by Gareth Jones)

Saudi Arabia & Bahrain VAT deadlines fall in December

date: 20181211

Organized By: Out Law - Joanne Clarke

External URL: https://www.out-law.com/en/articles/2018/december/saudi-arabia-and-bahrain-vat-deadlines-fall-in-december/

VAT will also come into effect in the Kingdom of Bahrain with effect from 1 January 2019, with an obligation for some businesses to register in December 2018.

Small businesses whose obligation to register for VAT in the Kingdom of Saudi Arabia (KSA) was deferred under transitional provisions will have to submit an application for registration by 20 December 2018. In addition transitional arrangements which meant that VAT did not have to be paid in respect of existing contracts come to an end on 31 December, meaning that contract prices may need to be renegotiated.

VAT was introduced in the KSA with effect from 1 January 2018.

Appreciating the challenge facing businesses in the region, the minister of finance Mohammed Al-Jadaan, together with the board of the General Authority on Zakat & Tax (GAZT), approved the inclusion of transitional provisions in the VAT Implementing Regulations in September 2017. Two of these transitional provisions may now require action by businesses.

Under KSA VAT rules, any person whose annual value of taxable supplies exceeds or is expected to exceed the mandatory registration threshold of SAR375,000 ($100,000) is required to register for VAT with GAZT within 30 days.

However, if the annual value of their supplies does not exceed SAR1 million ($267,000) the transitional rules provided relief from registration in advance of 1 January 2018. The rules defer the effective date of registration for these businesses to 1 January 2019, but the application for registration has to be submitted by 20 December 2018.

“To allow sufficient time to gather the necessary information and documentation for the registration application, together with the time it may take for GAZT to process your application, it is important that businesses affected by this transitional provision, who have not already voluntarily registered, start the process as soon as possible,” Joanne Clarke said.

5% VAT 'a starting point' for GCC, says banking chief

date: 20180918

Organized By: By Imogen Lillywhite, ZAWYA

External URL: https://www.zawya.com/mena/en/story/5_VAT_a_starting_point_for_GCC_says_banking_chief-ZAWYA20180918030447/

The 10th MENA CFO conference heard that VAT violators are being censured, with 3,000 offences recorded in Saudi Arabia in the first two months of 2018.

Gulf Cooperation Council (GCC) states could see higher rates of value-added tax (VAT) in the future, with the current five percent rate applied in the United Arab Emirates (UAE) and Saudi Arabia seen as a ‘starting point’, according to one UAE banking executive.

Pointing out that he was speaking in a personal capacity rather than for his employer, Emirates NBD, the bank’s group financial controller, Asim Rashid, said: “My personal view is that five percent is a starting point. The governance and administration of VAT is not cheap.

VAT will attract more global investors to UAE realty

date: 20180821

Organized By: Ryan Fansa/Trend Tracker/Dubai

External URL: https://www.khaleejtimes.com/vat-will-attract-more-global-investors-to-uae-realty

When value-added tax (VAT) was introduced in the UAE and Saudi Arabia on January 1, 2018, initially stakeholders were wary on the potential impact of the new tax policy on the economy.

A study conducted by Alliance Business Centers Network said that the UAE would be least affected by the imposition of VAT because it is one of the lowest globally compared to countries such as the UK, Switzerland, Germany, Mexico, South Africa and Australia. The study revealed that the VAT in UK and France was 20 percent, which is substantially higher than the five percent implemented in the UAE and Saudi Arabia.

With the adoption of VAT in the real estate sector, investors and stakeholders are weighing the impact on market valuations. According to Deloitte, in the UAE, commercial property is clustered in the taxable bracket and therefore the costs of buying or leasing such property are likely to increase.

Moreover, stakeholders in the UAE real estate sector see the pricing of ancillary services such as brokerage, maintenance services, car parking, facility management and property management increase as such services will be subject to VAT and do not fall within the exemption for rental of residential real estate, even where provided in connection with a residential contract.

Vat gets vote of confidence

date: 20180806

Organized By: Waheed Abbas

External URL: https://www.khaleejtimes.com/vat-gets-vote-of-confidence

Companies in the UAE and Saudi Arabia have given a vote of confidence to the implementation of VAT with 65 per cent of them having successfully filed their first VAT returns by April 2018.

According to the Association of Chartered Certified Accountants (Acca) and Thomson Reuters’ VAT Return Filing and Compliance survey conducted in April, only 18 per cent of companies had found filing their first VAT returns “challenging” and eight per cent “very challenging”.

Pierre Arman, market development leader for tax and accounting at Thomson Reuters, said that at the time of the survey in April, a lot of companies’ first VAT return deadline had been pushed by the Federal Tax Authority by one or two months, hence, about a third of firms did not file a VAT return at the time.

VAT in Saudi

date: 20180725

Organized By: Al Masah Capital

External URL: https://gulfnews.com/business/property/vat-in-saudi-1.2256514

When Value Added Tax (VAT) was introduced in the UAE and Saudi Arabia on January 1, 2018, initially stakeholders were wary on the potential impact of the new tax policy on the economy. While a study by Alliance Business Centres Network revealed that the UAE will be least affected by the imposition of VAT, the introduction of VAT in Saudi Arabia is changing the market dynamics and bringing more transparency to the sector.

A report published by JLL clarifies that VAT is applied to any real estate transaction in the country. The 5 per cent rate is implemented on the sale of a residential, commercial, transfer of ownership of undeveloped land, and the sale of partly completed construction works.

However, rental agreements are exempted from VAT charges, which may impact the sale of new property combined with the 5 per cent VAT on brokerage as buyers may divert from buying new property and instead opt for leasing as an alternative. Cost for leasing, though, may also increase as ancillary services are subject to VAT.

Similar to the UAE, VAT will contribute to the government’s initiatives for economic diversification and continued improvement of public services to the general public.
In conclusion, the above-mentioned views on the potential impact of VAT are only assumptions, since real estate is a long-term product, the real effect of VAT in both countries will be defined further in the coming years.

Lessons learned from the UAE and Saudi Arabia’s roll-out of VAT

date: 20180627

Organized By: MEED - Michael Camburn and Bruce Hamilton

External URL: https://www.meed.com/lessons-learned-uae-saudi-arabias-roll-vat/

With the entire supply chain affected by VAT, firms cannot start its implementation soon enough
Two of the six GCC states, the UAE and Saudi Arabia, introduced VAT on 1 January 2018. With Bahrain, Qatar, Kuwait and Oman in the process of organising their VAT implementation, the experiences in the UAE and Saudi Arabia provide an indication of issues that businesses in the GCC may face when VAT is rolled out across the rest of the region.

Main challenges
One overriding challenge observed in both the UAE and Saudi Arabia was that businesses typically underestimated the scope and level of effort required to implement VAT. The combination of dealing with a new tax, coupled with the significant business and systems changes that were required, put a lot of pressure on companies to adapt.

To their credit, most organisations got there in the end, but as our survey shows, 77 percent felt that they could have started the process at least three months earlier.

Our survey also revealed that 90 percent of those in the consumer business sector found it took longer than three months to implement, and more concerning, all in the technology sector said it took them longer than six months.

Creating, drafting and implementing tax law is a challenging task. Even though the intention to implement VAT was announced more than a year before the go-live date, detailed legislation was understandably and for a variety of reasons released relatively late in the process in both countries. Both the UAE and Saudi Arabia took a considered view that good tax law cannot be rushed.

Unfortunately, a number of companies were hesitant to commence implementation projects until after the release of the VAT legislation and the timeline for registration for VAT purposes was announced, leading to truncated implementation and delays in the commencement of projects.

Saudi prices rise by 2.8% so far in 2018 as VAT makes impact

date: 20180615

Organized By: Arabian News - Sam Bridge

External URL: http://www.arabianbusiness.com/banking-finance/398595-wkd-saudi-prices-rise-by-28-so-far-in-2018-as-vat-makes-impact

Prices in Saudi Arabia have risen by 2.8 percent year-on-year so far in 2018 due to the introduction of VAT and utility and fuel price reform, according to new research.

Jadwa Investment, citing the latest General Authority for Statistics (GaStat) inflation release for April, also showed that prices rose by 2.6 percent year-on-year in the month, declining by 0.2 percent month-on-month.

Jadwa said food and beverages prices rose by 5.7 percent year-on-year in April but declined by 0.9 percent month-on-month for the second time in a row.

Housing and utility prices rose slightly by 0.5 percent in April year-on-year, despite a spike in fuel prices in January, Jadwa noted, adding that housing rents, which have been showing negative growth rates since July 2017, weighed on this segment.

The research also said that after a decline in January, annual growth in point of sale retail sales have rebounded, with the average year-to-date rise of 13 percent, compared to 7 percent in the same period last year.

Despite the fact that this year saw the implementation of VAT, Jadwa said it still expects to see higher inflation rates in Ramadan.

Samaco, Bentley roll out VAT-free sales initiative

date: 20180609

Organized By: Saudi Gazette

External URL: http://www.saudigazette.com.sa/article/536539/Life/Drive/Samaco-Bentley-roll-out-VAT-free-sales-initiative

SAMACO, the new dealer for Bentley brand in Saudi Arabia, whereby Samaco incurs value added tax (VAT) dues on behalf of clients who are interested to own Bentley car model Bentayga W12; to be the first car dealer to offer such outstanding initiative, coinciding with the holy month Ramadan for this year.

Commenting on this remarkable offer, Mohammed Rafah, CEO of Samaco, said that the VAT free initiative specifically launched for the holy month of Ramadan to spur our clients who wish to own a highly sophisticated car such as Bentley Bentayga W12. This is, in addition, to provide, for the first time, a 5-year open warranty plus free periodical maintenance service for 3 years.

In response to this remarkable initiative, we start to receive orders on Bentley Bentayga W12 from the first day of Ramadan, we, as well, granted our clients the opportunity to test-drive the car to be familiarized with its strong performance and advanced technical capabilities.

Noting that Bentley Bentayga is one of the strongest and luxurious SUV models, equipped with twin-turbo charged 6-liter W12 engine generates 600 HP and maximum torque of 900 n/m partied with automatic 8-speed gearbox (ZF) all four wheel drives. The car achieves 0 to 100 km/h in 4.1 seconds and accelerates to a top speed of 301 km/H, making it the world’s fastest SUV.

Negative impact of VAT on UAE, Saudi only short-term – PwC

date: 20180604

Organized By: Aarti Nagraj - Gulf Business

External URL: http://gulfbusiness.com/negative-impact-vat-uae-saudi-short-term-pwc/

The introduction of value added tax (VAT) in the UAE and Saudi Arabia this year has had a negative impact on their economies in the short term with inflation rising, a new report by consultancy PwC has found.

Inflation rose to 3 percent year-on-year in Saudi in January, after a year in which consumer prices were largely suffering deflation, with a smaller step up in the UAE to 4.8 percent.

This compares to very low rates of inflation in the rest of the GCC where VAT is yet to be introduced (below 1 percent in Kuwait, Qatar and Oman).

The purchasing manager indices (PMIs) for Saudi and the UAE also showed a slump. Saudi had been close to a two-year high in December but dropped in January to a record low of 53 (albeit still above the 50-mark that signals economic expansion).

UAE, which had been at a record level in December, slipped more gradually, down to 54.8 in March, its second lowest reading in a year.

However, the implementation of the tax will prove beneficial for regional economies in the longer term, the report added.

“Although adjustments such as subsidies cuts and the introduction of VAT this year have had short-term negative impacts, they should make the economy more efficient,” the report said, referring to the UAE.

According to the latest IMF forecasts, the country’s real GDP growth is expected to reach 2 percent in 2018 ( up from an estimated 0.5 percent in 2017) and average 3.1 percent in 2019-23. The deficit is narrowing and is expected to return to a surplus by 2022.

UAE, Saudi Arabia mobile phone shipments hit by vat

date: 20180528

Organized By: Gulf News Technology

External URL: https://gulfnews.com/business/sectors/technology/uae-saudi-arabia-mobile-phone-shipments-hit-by-vat-1.2228053

The introduction of value-added tax (VAT) and poor job security have taken a toll on first quarter mobile phone shipments into the UAE and Saudi Arabia.

According to the latest numbers from research firm International Data Corporation (IDC), total mobile phone shipments into the UAE declined by 14.7 per cent quarter-on-quarter, and 5.4 per cent in Saudi Arabia quarter-on-quarter, while smartphone shipments into the UAE were down 4.6 per cent.

Nabila PopalNabila Popal, a senior research manager at IDC, said the UAE market was experiencing a significant shift in consumer spending as evidenced by the first-ever cancellation of the spring edition of Gitex Shopper.

She added that the true impact of this shift could be seen in the independent retail stores of Deira, the traditional trading and commerce centre of Dubai, where shops that were previously impossible to lease are now sitting vacant.

“Organised mall-based retail chains that focus exclusively on consumer electronics are also struggling. Businesses in Qatar, meanwhile, will continue to suffer from the prevailing political challenges and import embargoes that have already impacted the country’s mobile phone market,” she said.

“The size of the overall market in Saudi Arabia is expected to decline over the coming years as a direct result of the new expat dependent tax,” said Kafil Merchant, a research analyst at IDC.

“A significant portion of the local population is expected to leave the country due to the introduction of this levy, with the exodus expected to run into the millions. The full impact remains to be felt, however, as many expatriates are waiting for the school year to end before leaving,” he said.

The report states that Nokia continues to dominate the vendor landscape for feature phones, garnering 87 per cent share of the overall GCC market in first quarter.

Saudi companies urged to file VAT returns by month-end

date: 20180528

Organized By: Aarti Nagraj - Gulf Business

External URL: http://gulfbusiness.com/saudi-companies-urged-file-vat-returns-month-end/

Saudi’s General Authority of Zakat and Tax has urged companies and entities registered for value-added tax (VAT) to file their tax declaration for the month of April by Thursday, May 31.

Companies whose annual value of taxable goods and services exceeds SAR40m have to declare their returns every month, according to local media reports.

Meanwhile, entities whose annual values of taxable goods and services are less than SAR40m are required to file their tax declarations every three months.

The tax authority emphasised that companies that failed to submit their declaration in time would face fines of between 5 per cent to 25 per cent of the value of tax that was due to be paid.

In addition, the penalty for not paying tax in any given month is equivalent to 5 per cent of the unpaid tax.

Saudi Arabia implemented the first phase of VAT from January 1 this year.

All companies with annual revenue exceeding SAR1m are required to register for the tax. After the first phase, companies with annual revenues of between SAR375,000 ($100,000) and SAR1m have until December 20, 2018 to register.

Saudi tax authority exposes more than 5,000 VAT violations this year

date: 20180514

Organized By: Arab News - MOHAMMED AL-SULAMI

External URL: http://www.arabnews.com/node/1302036/saudi-arabia

The General Authority of Zakat and Tax (GAZT) has stepped up its value-added tax (VAT) inspections in the build-up to Ramadan with its accompanying rise in trade.

The GAZT confirmed that it has issued orders for 5,212 VAT violations against non-compliant businesses since VAT was implemented in the Kingdom.

Violations ranged from issuing VAT invoices without all the required information to collecting taxes that exceed 5 percent, not including a tax number on the invoices and eligible businesses not registering for VAT.

The GAZT said in a statement that its field inspections across the Kingdom targeted several sectors, including shopping malls, car maintenance centers, electrical appliance stores, and food markets.

The authority aims through its field inspections to raise the awareness of businesses about the importance of applying VAT to follow up on whether they were complying with the tax, and to ensure proper application of all VAT procedures.

The GAZT urged all consumers to use the VAT smartphone app as it allows them to know if the businesses they deal with are registered in the VAT system and to report violating businesses.

Saudi Inflation Starts to Decline as VAT Impact Lessens

date: 20180425

Organized By: Arab News - Rebecca Spong

External URL: https://www.albawaba.com/business/saudi-inflation-starts-decline-vat-impact-lessens-1122052

Saudi Arabia’s inflation rate has started to slowly decline as the impact of value-added tax (VAT) and subsidy cuts introduced at the start of the year begin to lessen.

Consumer prices rose by 2.8 percent year on year in March, according to official statistics released on April 24, compared to a rate of 2.9 percent in February.

Inflation leapt to 3 percent year-on-year in the immediate aftermath of the introduction of a 5 percent VAT charge in January.

The new tax was introduced by the Kingdom in an effort to boost its non-oil revenues as well as narrow its fiscal deficit caused by lower oil revenues. The UAE also introduced VAT in January.

While Saudi households initially struggled with the higher rate of inflation and started cutting back on spending, analysts say public sector bonuses, pledged by the government, will help boost consumer purchasing power.

In January, a royal order outlined a range of bonuses and benefits to be paid out to public sector workers, pension holders, students and members of the military.

VAT is bringing about a 'change' in payments

date: 20180409

The 5% VAT levy on goods and services is bringing a change in the way retail merchants have to manage ‘change’.   Items with the 5% VAT have changed the price from 5.00 to 5.25, thus expecting either the customer to give the 25 fils coins, or take back 75 fils from the merchant.

The UAE government has clarified that there is no scarcity of small coins, however merchants have to gear up now to handle a larger volume of coins.

However, retail will see a bigger impact when more and more customers switch to a cashless mode using their debit cards. The bank charges on debit/credit card will impact profitability that is already under stress due to the 5% VAT.

 

KPMG sheds light on VAT challenges in Saudi, UAE

date: 20180314

Organized By: By: dt news , Posted on 14-Mar-2018

External URL: http://www.newsofbahrain.com/viewNews.php?ppId=42793&TYPE=Posts&pid=21&MNU=2&SUB=50

Around 100 business leaders and senior finance executives gathered yesterday at an event organised by KPMG in Bahrain to review and debate the first 100 days of VAT in the GCC and the lessons to be learnt for Bahraini businesses from the introduction of value-added tax (VAT) in the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE).

The half-day seminar, ‘VAT compliance for Bahrain businesses in KSA and UAE: the do’s and don’ts in Bahrain and beyond’ examined the current implications on Bahraini businesses with operations in or with Gulf countries that have already implemented VAT, how to tackle these, how to ensure a correct tax treatment from business partners and what to expect in Bahrain including process and technology solutions.

UAE and KSA will be the only GCC country with VAT this year

date: 20180218

“Kuwait, Qatar, Bahrain and Oman will need more time than expected for implementing the GCC agreement to introduce Value Added Tax, even though Saudi Arabia and the United Arab Emirates have already implemented the tax”, says the Deputy Director of Financial Affairs Department at International Monetary Fund (IMF) Abdelhak Senhadji.

In December 2017, Saudi Arabia and the UAE introduced excise taxes on energy drinks, fizzy drinks and cigarettes, and they introduced VAT one month later. Bahrain had also introduced excise taxes in December 2017 but the government suspended the introduction of VAT until a joint committee of the Cabinet and the parliament decides on a mechaplot nism to help Bahrainis with limited income to deal with the consequences of implementation of the tax system.

According to a report issued by the ratings agency S&P last month, Qatar was not expected to introduce VAT in this phase as it was faced with the threat of a boycott and the closing of travel, trade and diplomatic ties by the UAE, Saudi Arabia and Bahrain.

5% VAT on fuel from January 1 in Saudi Arabia

date: 20171119

External URL: http://gulfnews.com/business/economy/vat/saudi-arabia-to-impose-5-vat-on-fuel-from-january-1-1.2126739

The standard Value Added Tax (VAT) of five per cent will be applied to purchasing petrol, Saudi Arabia’s General Authority of Zakat and Tax (GAZT) has said.

The confirmation was stated in a reply to an online question whether there would be a VAT rate of petrol. “The VAT rate of five per cent for petrol will be applied starting January 1, 2018,” GAZT said.

Last week, the authority said the local transport of passengers and goods within Saudi Arabia, and associated services would be subject to the standard 5 per cent VAT rate, with businesses collecting the tax from travelers upon purchasing the travel ticket.

However, it said that the international transport of passengers and goods will be zero-rated according to the Unified VAT Agreement for the Gulf Cooperation Council (GCC) and the VAT Implementing Regulations.

The zero-rated services include excess baggage and seat reservation fees, maintenance, repair and modification of qualified international transport, storage charges, port charges, parking fees, customs duties, customs clearance fees, transport-related fees, air navigation services fees and aircraft crews.

Read the full article here.

VAT to create 5,000 Jobs in UAE and KSA

date: 20171012

External URL: http://www.arabnews.com/node/1176006/business-economy

DUBAI: Around 5,000 finance and accounting jobs would be generated with the introduction of the Value Added Tax (VAT) in the Gulf region, a tax law expert said on Wednesday.

The Unified Agreement for VAT of the Cooperation Council for the Arab States of the Gulf, which was signed by the six member states of the Gulf Cooperation Council, required signatories to enact domestic legislation that would introduce a 5 percent VAT on certain transactions.

Gulf states have been looking at other ways to reduce dependency on oil revenues, as well as create new income streams to fund government services including public health services, public owned or funded schools, parks and transport infrastructure.

It is estimated that the VAT’s imposition will raise between $7 billion and $21 billion annually — or between 0.5 percent and 1.5 percent of regional GDP. The IMF has said the returns could reach around 2 percent of region’s output.

Saudi Arabia and the UAE are expected to be the first Arabian Gulf countries to introduce the GCC-wide VAT on January 1, 2018, while other member states Kuwait, Qatar, Bahrain, and Oman have committed to implementing their own VAT taxation by next year.

Among the goods and service that would be subjected to VAT include electronics, smartphones, cars, jewelry, certain beverages, financial and accounting services, legal services, dining out and entertainment.
Certain services and goods such as nearly 100 food items, basic health services, transport and public education will be exempted from VAT.
The UAE has separately started to collect excise taxes at a rate of 100 percent on tobacco and energy drinks and 50 percent on fizzy drinks on October 1.

UAE Retail Sector will be affected by VAT

date: 20170925

External URL: http://gulfnews.com/business/economy/vat/vat-likely-to-affect-uae-retail-sector-1.2094569

The appliances sector, especially consumer electronics, will be hardest hit by the introduction of value-added tax (VAT). As for other segments of the retail sector, the UAE’s first major tax will have varying degrees of impact.

This elasticity of demand, meaning the relationship between price and demand (a product type is considered elastic if demand drops when prices increase, and inelastic when demand isn’t changed by price increases), will impact how much retailers are able to absorb the cost of VAT.

Pricing strategies such as this will help retailers avoiding passing the entirety of the cost increase on to their customers.

According to Deloitte, however, products such as appliances, which have a high elasticity of demand, are not able to pass as much cost on to their customers if they are to remain competitive.

“When demand is perfectly inelastic (i.e. an increase in price has no effect on demand) retailers should be able to pass on the full burden of VAT to the customer. This is, however, seldom … the case,” said Deloitte in a research report on the impact of VAT on the retail industry across the Gulf.

The UAE and Saudi Arabia are among the first countries in the Gulf to implement the tax, that is expected to provide a new source of revenue for governments to spend on infrastructure and other public services.

The UAE is expected to issue VAT laws in the third quarter of this year and the online registration will begin in mid-September.

All businesses that meet the minimum annual income of Dh375,000 as confirmed by their financial records are required for compulsory registration with the VAT system.

Fines will be levied against the firms that failed to register with the system, the UAE’s Federal Tax Authority said earlier this month.

This is an excerpt from a news article published by The Gulf News. You can read the complete article by clicking here

 

VAT can be Paid in Installments in Saudi, if Companies Meet Certain Criteria

date: 20170920

External URL: https://www.zawya.com/mena/en/story/Saudi_to_allow_VAT_payments_in_installments_with_certain_conditions-ZAWYA20170919052814/

Saudi Arabia’s General Authority for Zakat and Tax (GAZT) said it will allow the payment of value-added tax (VAT) charges in installments over a period of up to 12 months, a local newspaper said.

The authority stated this would be allowed if the person or entity being taxed presents evidence that they are unable to pay the tax when due, or are suffering hardship from paying the charges in a single payment.

The taxable person must send a request to the tax authority citing the reasons for inability to pay the tax by the due date. The authority will confirm whether the request is approved or rejected within 20 days

The Saudi tax authority has already opened registration for VAT on its online portal ahead of the official implementation of the tax starting January 2018.

Businesses are required to register for VAT by December 20, 2017 and the tax authority will impose a 10,000 Saudi riyals ($2,666) penalty on companies or entities that do not register within the deadline.

This is an excerpt from a news article published by Zavya. You can read the complete article by clicking here

KSA Releases VAT Law

date: 20170830

Organized By: KSA

External URL: https://vat.gov.sa/images/Regulations/Value-Added-Tax-Approved-Implementing-Regulations-Bilingual.pdf

August 29, 2017 – KSA has released its final VAT Law and Regulations today. The GAZT had previously published its VAT Draft Implementation Regulations for public consultation in July.

Click here to read the final KSA VAT Implementation Regulations. 

VAT will be implemented in the country on January 1, 2018, and businesses should start preparing for it and begin analysing how their operations will be affected.

The first step for businesses would be to confirm if they are required to register for VAT and make sure that they register according to the below-mentioned guidelines:

  • If your company is large and has already registered itself for some other form of Tax in the Kingdom, then the company may be auto-registered for VAT. If you meet the above condition, you will receive a notification from GAZT but you still have to log-in to check and validate the information.
  • If you have not received a notification but are eligible for VAT, you are required to start the registration process starting 28 August 20017.
  • In the application process, you will have to provide information such as
    • Are you an importer, exporter or both?
    • Bank account details
    • VAT eligibility start date
    • Values of the VAT taxable supplies of 12 months
    • Financial Representative details if you are not a Saudi National

The final regulations are different from the draft regulations issued before and businesses should take care to scrutinize the details.

You can access the final KSA VAT Implementation Regulations by clicking here.

KSA VAT Registration process announced

date: 20170818

Organized By: KSA GAZT

External URL: https://vat.gov.sa/en/vat-online-services/vat-registration.html

The KSA Government has officially announced the process for VAT Registration in the country.

In order to register for VAT, businesses must first be registered at GAZT for Zakat and Income Tax.

Some large companies, particularly those already registered for other forms of tax in Saudi Arabia, will be auto-registered for VAT by GAZT:

  • If this applies to your business, you will receive a notification from GAZT notifying you of this
  • In that case, we advise you to log-in to check the validity of the information and to upload any supporting documents you may have on the following link: https://gazt.gov.sa/ then click on user login

If your company is not auto-registered, Registration will be open to all eligible companies and businesses starting 28 August 2017 also through the following link: https://gazt.gov.sa/ then click on user login.

The Registration form will require you to specify:

  • Whether you are an importer
  • Whether you are an exporter
  • IBAN number (for refunds) – not required if already logged with GAZT
  • VAT eligibility start date
  • VAT taxable supplies (expected over next 12 months)
  • VAT taxable supplies (past 12 months)
  • VAT taxable purchases (expected over next 12 months)
  • VAT taxable purchases (past 12 months)
  • Financial Representative details (only mandatory if you are not a Saudi resident)

VAT impact will be softened by businesses to stay competitive

date: 20170818

Organized By: Gulf News

External URL: http://m.gulfnews.com/business/economy/companies-likely-to-absorb-a-share-of-vat-to-remain-competitive-1.2075905

In a recent article in Gulf News, the Banking Editor, Babu Das Augustine, presents the case that companies may absorb the VAT to stay competitive.

Analysts feel that given the weak overall demand, companies may not be able to pass on the full impact of VAT on the consumer. Read more about this on the Gulf News link

KSA announces December 20, deadline for registration

date: 20170818

Organized By: Bloomberg BNA

External URL: https://www.bna.com/saudi-arabia-sets-n73014463204/

The confusion surrounding the deadline for registration in Saudi Arabia has been set to rest. The deadline for mandatory registration for VAT in KSA has been set as December 20, 2017.

The Saudi VAT law, announced on July 28, mentioned a deadline of “30 days” from its publication without a specific date, sparking speculation from professional advisers and media that businesses liable to pay VAT had only until Aug. 26 or 27 to register.

“All companies, businesses or entities which make an annual taxable supply of goods and services in excess of SAR 375,000 are legally required to register for VAT by 20th December 2017,” the new government website has declared.

Read more at Bloomberg site

KSA publishes its final VAT Law

date: 20170730

Organized By: General Authority for Zakat and Tax (GAZT)

External URL: https://www.uqn.gov.sa/articles/1501187155033127200/

July 28, 2017: The Kingdom of Saudi Arabia has released its final VAT law on its official Gazette on Friday, 28th of July. Please refer to our VAT Rule Book for KSA to learn about this in depth.

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)

KSA releases draft regulations for implementing VAT

date: 20170723

Organized By: General Authority of Zakat & Tax - Saudi Arabia

The General Authority of Zakat & Tax has on it’s site released a bilingual copy of the VAT Implementing Regulations. This contains 12 chapters and is available on our webpage – Rule Book KSA

Shoura approves VAT Law

date: 20170713

Organized By: Shoura Council

External URL: http://saudigazette.com.sa/article/512755/SAUDI-ARABIA/Shoura-Council

RIYADH – The Shoura Council on Wednesday approved the draft Value Added Tax (VAT) law. It also stressed the need for activating the uniform program for Citizens Account prior to implementing VAT.

Yahya Al-Samaan, assistant president of the Council, said that the Council took the decision after listening to the report of the financial committee on VAT, read out by its chairman Osama Al-Rabiah.

He said that the draft law is in line with the provisions of the uniform agreement, signed by the Gulf Cooperation Council (GCC) states to implement VAT.

Saudi Arabia Releases VAT FAQ's

date: 20170708

Organized By: General Authority of Zakat and Tax (GAZT) of the Kingdom of Saudi Arabia

The General Authority of Zakat and Tax (GAZT) of the Kingdom of Saudi Arabia has released answers to Frequently Asked Questions (FAQ’s). Click here to learn more.

KSA commences pre-registration for VAT

date: 20170706

Organized By: Deloitte Inc.

As per an update by Deloitte, Kingdom of Saudi Arabia will pre-register large businesses automatically using the existing database with the economic departments. The minimum data for pre-registration is available, and businesses will receive email notification to complete the information.

Draft VAT Law published by KSA

date: 20170501

Organized By: Kingdom of Saudi Arabia

Draft Law has been released by the Kingdom of Saudi Arabia for public discussion.

VAT and excise awareness sessions

date: 20170312

Organized By: Ministry of Finance, UAE

The Ministry of Finance UAE, has released a calendar of workshop for VAT awareness. The sessions will be held in Abu Dhabi, Dubai, Sharjah, Ajman and Fujairah. Sessions are open to public and require prior registration through the ministry portal.