8th November 2017
Saudi Arabia’s General Authority of Zakat and Tax (GAZT) released the final implementing regulations to legislation governing the new GCC-wide value-added tax (VAT). VAT will be introduced at a standard rate of 5%.
The Regulations, which build on the GCC Unified VAT Agreement and Saudi VAT Law, govern all aspects of the implementation of VAT in Saudi Arabia. The Regulations include 79 articles, divided in 12 chapters, and set out the scope of taxation for certain goods and services, explain registration rules and eligibility of businesses for VAT, zero-rated and exempted supplies, the treatment of imports and exports, among other areas.
All companies with an annual taxable supply of goods and services of SR375,000 ($100,000) or higher are required to register by December 20; however, companies that do not exceed SR1m ($267,000) will be granted a one-year extension. This should go some way towards helping small and medium-sized enterprises achieve compliance smoothly.
Businesses with turnover below the threshold, but in excess of SR187,500 ($50,000), can register voluntarily to help recover VAT from their expenses.
More details can be found at a dedicated VAT website - VAT.GOV.SA - which has a range of resources and tools for businesses.
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