VAT in Saudi Arabia: Traders can Register till December 20th

VAT - Saudi - Arabia - Taxscan

While Saudi Arabia is all set to implement Value Added Tax from 1st January 2018, the Government has set a deadline of 20th December 2017 for mandatory registration for traders.

The draft VAT law, which was issued on 29 May, did not mention a specific deadline for VAT registration,” Shiraz Khan, team leader of the Middle East tax practice at the Al Tamimi and Co. law firm in Dubai, told Bloomberg BNA by email Aug. 16. This surprised practitioners “because the online VAT registration portal was not expected to open until September and so it was not even possible for all taxpayers to register in practice within this timeframe, except certain large taxpayers that were automatically being registered” by the General Authority of Zakat and Tax (GAZT).

After the publication of draft regulations in July last week, the Government has now confirmed a clear date for registration under the new tax law. The registration will be opened from august 28th in the new website portal. The registration procedure will be in accordance with the provisions of the draft executive regulations.

Taxable persons whose annual taxable supplies exceed the mandatory registration threshold but don’t exceed 1,000,000 riyals ($266,638) will be exempted from the requirement to register for another year, the website said, while those supplying in excess of 187,500 riyals can register voluntarily.

Voluntary Registration provides significant benefits for the companies since it allows the deduction of input tax,” the website said.

Non-residents obliged to pay VAT for their economic activities in the kingdom must also register, but they must have a “Tax Representative established in Saudi Arabia and who is approved” by GAZT.

Some large companies already registered with GAZT will be automatically registered for VAT.

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