GCC VAT Overview

The Kingdom of Saudi Arabia has also been progressing rapidly towards the implementation of VAT. The unified legal framework to introduce VAT in the GCC states has been ratified by the Kingdom of Saudi Arabia cabinet (decision number 257 dated 30 January 2017) and issued by royal decree (number m/51 dated 31 January 2017).

KSA has prepared primary domestic legislation, known as the KSA VAT law, to set out how VAT is being implemented in the Kingdom. The KSA VAT law follows closely the GCC Unified Agreement and aims to make domestic provisions following the same framework and will be accompanied by Implementing Regulations which detail the implementation. This includes, but is not limited to, VAT treatment of specific goods and sectors in terms of exemptions, zero-rating, standard or reduced rating as well as any mechanisms to deal with specific sectors.

Schedule of Implementation

Probable Dates Activity
May 29, 2017 Release of Draft Law
July 23, 2017 Release of VAT Implementing Regulations
4th Quarter 2017 Registration of Businesses, could even start in the third quarter of 2017.
January 1, 2018 Implementation
April 1, 2018 Expected filing of First Return

KSA has released a bilingual copy of the Value Added Tax – Implementing Regulations.

  • The draft of Implementing Regulations is structured into 12 chapters:
    • Chapter 1: General definitions
    • Chapter 2: Taxable persons
    • Chapter 3: Supplies of goods and services
    • Chapter 4: Place of supply
    • Chapter 5: Exempt supplies
    • Chapter 6: Zero-rated supplies
    • Chapter 7: Taxable value of Supplies
    • Chapter 8: Imports
    • Chapter 9: Calculation of tax
    • Chapter 10: Procedure and administration
    • Chapter 11: Refunds of Tax
    • Chapter 12: General provisions

Download the full text of the Implementation Regulations