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KSA issues updated information on VAT Implementing Regulations

On 21 January, 2018, The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) released updated information pertaining to the Value Added Tax (VAT) Implementing Regulations, and published an updated bilingual version of these Regulations available here.

In addition to the three changes below which had been communicated earlier, GAZT has made an amendment surrounding the entry of data into an enterprise resource planning (ERP) or other computer systems. The amended article 66 specifies that data should be entered into the system in Arabic “whenever and to the extent practicably possible”. This amendment marks a small but important relaxation to the prior requirement for entry in Arabic in all cases, given that many international ERP systems are designed for English input only. 

The requirement for tax invoices and all records to be issued in Arabic remains as previously stated.

It is important to note that the series of amendments made to the Implementing Regulations articles 8, 53 and 63 announced earlier in January have been formalized. For reference, please see below:

  • Article 8: The VAT registration certificate of a business or a branch should be displayed and visible to the general public.
  • Article 53: All registered businesses need to issue a simplified VAT invoice for all transactions not otherwise covered specifically by the remaining paragraphs in the Article – this will generally affect transactions with the end consumers.
  • Article 63: If the understatement of Net Tax by the Taxable Person is less than SR 5,000, the taxable Person may correct the error by adjusting the Net Tax in its next Tax Return.

Businesses that do not comply with their obligations (including the requirements above) will be penalized. The standard penalty for violations of the Law and Regulations is up to SAR 50,000.

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